Velvet Sky sold months after taking off
Cecil Reddy the majority shareholder of newly launched Durban-based airline Velvet Sky has sold his shares in the company just three months after it took to the skies. Cecil Reddy the majority shareholder of newly launched Durban-based airline Velvet Sky has sold his shares in the company just three months after it took to the skies.
Suren Naidoo
THE major shareholder of Durban airline Velvet Sky, Macdonald Holdings, has sold its stake in the airline less than four months after it was launched.
The budget airline has been bought for an undisclosed amount by Joburg-based Excalibur Aerospace, headed by lawyer and private equity entrepreneur Stephen Nthite.
Nthite could not be contacted for comment yesterday, but Velvet Sky put out a statement on the finalisation of the deal.
“Excalibur Aerospace bought a majority stake of Velvet Sky and is seeking to profit from local demand for an affordable airline that services the nation at a discount to what the competitors charge,” it said.
“The company principally engages in consulting in passenger, cargo, and mail airline services. It also consults for logistics services; air catering services; pilot training services; property management services; aircraft and engine repair and maintenance services; flight simulation services; and airport ground services, as well as for those who sell duty-free goods in-flight,” said Velvet Sky spokesman Yaseen Theba.
“The company was founded in 2008 and is headquartered in Johannesburg. Excalibur Aerospace operates as a subsidiary of Excalibur Holdings. Excalibur Aerospace is planning to launch new routes and increase the fleet in Velvet Sky,” he added.
Theba said while the new major shareholder was Joburg-based, Velvet Sky’s main office would stay in Durban. Nthite is the airline’s new board chairman. The airline’s founder, Dhevan Pillay, will continue as chief executive.
Nthite is also chairman of KT3 Logistics, an independent non-executive director of Healthi Choices and a director of First Equity Legal.
Cecil Reddy, the boss of Macdonald Holdings, a Durban steel and engineering group, said the deal was finalised and signed last week.
He said the group had decided to divest from Velvet Sky and focus on its core business, opting to use the money from the sale for expansion into India and Africa.
Reddy would not divulge the value of the deal with Excalibur, but said Macdonald Holdings had recovered the “substantial sum” it had invested in getting Velvet Sky in the air.
“Selling our stake was a business decision to rather focus on our core business at Macdonald Holdings, which is largely in the steel and engineering sector,” he said.
“It was a tremendous effort to get Velvet Sky off the ground and we had been involved for about a year before it was launched.
“We needed a lot of our human resources that were sent to the airline back to focus on new opportunities that have come up for us in our core business.”
The inaugural Velvet Sky flight landed at King Shaka International Airport from Joburg on March 22. The airline has been operating a Boeing 737, which it sourced from aircraft leasing company Aergo. It is expected to increase it fleet and is considering international routes.
Last week the South African National Taxi Council also announced that it planned to enter the budget airline market later this year with Santaco Express.