Strategic partners are the talk of the town. The "sale" of 51% of SAA by the government is a ground-breaking, precedent-setting development, which completely opens up the possibilities for public-private partnerships. That is a good thing. The government is selling control of a state-owned enterprise (SOE) - have you ever? (If indeed that's what it is - it would be a grave error for it to be found out not to be. Deal details are sketchy, and not final, it seems.)
If you sell control and yet maintain a minority stake, you'd better be doing that on purpose. You have to believe that you'll be better off in the hands of the new skipper to stay on the boat - in the full knowledge that it'll now sail a course not of your choosing - rather than cash in and deploy your capital elsewhere.
Most often, in the private sector, the introduction of the right strategic partner will result in a positive revaluation of the company, to the benefit of all shareholders.
In SOEs, a case can often be made for the state having to stay in to protect the national interest and oversee the implementation of developmental agendas. A "golden share" may entrench such rights, but extraordinary wisdom, independence and common purpose are required to manage the developmental and commercial mandates side by side, without mixing them.
SOEs are a different species, and they'll need to be tackled differently to endure the public-private mixture.
There are some principles that cannot be broken.
Everything must be dealt with at fair market value - which underpins and directs the flow of informed capital. Undue favour will totally undermine the very purpose of seeking a strategic partner. It'll never be forgotten, it can't be undone and it'll hang over the relationship between stakeholders, like a bad smell, forever. The enterprise will be weaker and less brave for it.
The sellers can't finance the buyers (in the case of the state, whether it be direct vendor finance, via other state funds, or through government guarantees). Vendor financing doesn't pass risk to the new shareholders. When you borrow money to buy shares, the credit provider becomes the stakeholder in control. In the case of SOEs, any such state assistance is nothing more than another bailout, circuitously engineered. Not only is that wrong, it is deceptive.
The essence of the strategic input must be clear - if it isn't obvious, nobody will care and the impact will be negative, not neutral. Everybody knows an expert. Everybody knows an actor.
Governance structures and rights attaching to control must be respected. These include, most visibly, board and executive appointments, and remuneration and incentive structures.
An extraordinary amount of time needs to be spent in advance of such partnerships, agreeing mandates, responsibilities, restricted areas and final-say rules. These differentiate and define efficient businesses, and they're far more difficult to correct later than to get right at the outset.
Failed SOEs are fertile ground for public-private partnerships, crying out as they are for the infusion of independent minds and capital. Let's start modestly, and slowly, on cases most likely to succeed, so that they can prove the hypothesis and cross the inferiority-superiority complexes that divide us in business. A couple of wins will gather confidence and build up case studies - templates of successful co-operation and trust.
There will be objections, particularly from those who do well out of a dysfunctional state. They should step aside - there is little time left to find solutions to our pressing unemployment, poverty and inequality challenges, none of which will be solved without a capable, functional and commercially sustainable state.
• Barnes is a business leader and experienced all-rounder in financial markets and corporate strategy
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