ANDILE KHUMALO: SAA flight to survival could go via Telkom
“There are more than 700 state-owned companies in South Africa, but not all of them would make business sense for an investor to buy....”
When Finance Minister Malusi Gigaba unveiled plans to sell non-core state-owned assets and partially privatise state companies, he was met with much scepticism. I was one of those who was not convinced by the Treasury's argument that the sale of non-core assets would pull the economy out of recession. This is largely because South Africa has to do much more than just sell some assets to improve economic growth. But, nonetheless, the country finds itself at a point where it needs to offload the baggage to keep South Africa afloat. There are more than 700 state-owned companies in South Africa, but not all of them would make business sense for an investor to buy as many are regulatory boards, trusts or development agencies. There are two main reasons for a shareholder to consider selling an asset: to make big money or to get out of a sticky situation. Falling tax revenues, rising expenditure and ballooning debt obligations are good enough reasons for the Treasury to consider selling on...
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