South African Airways (SOC) Ltd
Request for Information for possible
management outsourcing and business
partnership/ownership models with SAA
on Air Chefs (SOC) Ltd
RFI-GSM074/15
REQUEST FOR INFORMATION
Instructions on Completion of Request for Information Document.
Sections 2 are to be completed by the proposer.
SAA will be glad to accept any information you can offer on the option/s as stated.
This request for information must be completed in English and the offers must be stated in South African Rand.
This information request does not obligate SAA or Air Chefs in any form and we reserve our rights.
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Table of Contents
1. Background 4
1.1. About Air Chefs 4
2. Purpose of the RFI 5
3 Request for Information (RFI) 6
3. Provision of information 14
4. Structure of responses 15
5. Participation requirements 17
5.1. Enquiries and perusal of information 17
5.2. Closing date and time 17
5.3. Method and place of submission 17
5.4. Condition of award 18
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SECTION 1: REQUEST FOR INFORMATION DETAILS
1. Background
1.1. About Air Chefs
Air Chefs SOC Ltd (“Air Chefs”) is a wholly-owned catering and allied service subsidiary of
South African Airways SOC Ltd (“SAA”), formed in 1986 through a Joint Venture between
Transnet (51%) and Fedics Strategic Investments (49%). In 2002 SAA, a fully State Owned
entity and also the primary client airline, acquired the stake held by Fedics. Air Chefs currently
services five Airlines within the domestic and regional markets.
In response to changing market conditions which eroded its profitability, Air Chefs has
implemented a turnaround strategy which is expected to return the company to profitability. Part
of the plan is to consider strategic partnerships with other in-flight catering and non-in-flight
catering companies, thereby diversifying the business of Air Chefs to accelerate the
improvement of its profitability (through growth and new business) and maintain and enhance
operational excellence.
Air Chefs’ vision is to be Africa’s Leading World Class Catering Company and its mission is to
deliver commercially sustainable catering services in South Africa and Africa. Air Chefs has the
following values:-
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ACCOUNTABILITY – taking ownership for the role in the organisation, and accepting
the consequences of our performance.
INTEGRITY – adhering to high moral principles and professional standards at all times.
RESPECT – for each other- consideration, thoughtfulness and respect to our fellow
colleagues.
CUSTOMER FOCUS- considering the customer first in all that we do.
HONESTY – being fair, truthful and morally upright
EMPLOYEES- putting our people first
FOOD THAT DELIGHTS – Excellence in both menu design and food quality
SAFETY & SECURITY – Adopting a zero defect mentality towards safety and security
and striving for zero incidents through proper training, work practices, risk management
and adherence to safety, health, environmental, security and quality regulations at all
times.
2. Purpose of the RFI
SAA is considering management outsourcing or business partnering options to diversify its
exposure in Air Chefs while ensuring the continued operations and growth of the Air Chefs
business.
The purpose of this RFI process is to establish the nature and extent of the appetite from the
market to engage in the outsourcing of the management of Air Chefs or business partnership
with SAA, in the Air Chefs business, that allows SAA to meet its key strategic objectives which
are :-
Guarantee security of supply
Re-capitalisation of Air Chefs for capital and operational expenditure
Sales/ Revenue growth of Air Chefs through access to different markets and / or
complementary customer segments and/ or service lines
Internal efficiency/Operational restructuring of Air Chefs (Expedite turnaround)
Continued contribution to the Government’s National developmental objectives
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SAA may also consider a possible complete divestment of Air Chefs without forgoing the above
objectives
3 Request for Information (RFI)
SAA has through its own investigation of the market identified the following business
partnership models:-
1. Management Agreement
2. Joint Ventures
3. Strategic Equity Partnership (part sale of Air Chefs’ equity)
4. Full sale of Air Chefs’ equity
Interested parties are hereby invited to submit proposals on how they intend collaborating with
Air Chefs. The options listed above are not exhaustive and interested parties are free to
propose other models which will achieve the objectives set out in 2 above.
The respondents to the RFI must meet and demonstrate the following minimum qualifying
criteria:-
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Business partnership model
Financial Market/industry Socio-economic Other
Qualifying criteria
common to all options
(except Management
Agreement)
Balance Sheet
o Minimum liquid
assets of R100m
and/ or
o Minimum debt
facility of R100m or
o Demonstrate that
capital of not less
than R100m can
be raised.
Respondents must be
willing to invest capital
in Air Chefs in any form
of instruments available
at its disposal
Or must be able to
demonstrate its
ability to raise
capital for this
transaction
Although responses
for all lines of
business are
welcomed, preference
will be given to
businesses in the
airline catering,
events, restaurants,
hospitality, FMCG and
logistics sectors
If not in the above
sectors, strong
consideration will be
given to responses
that clearly shows
innovation regarding
the Air Chefs
business model and/
or complementary
nature and synergies
of business
Respondents must be
prepared to comply
with B-BBEE
legislation if selected
as a partner
Respondents must
provide a
transformation plan to
achieve
developmental
objectives such as
ownership by the
previously
disadvantaged
Respondents must
comply with section
197 of the Labour
Relations Act (LRA)
as amended
Respondents must not
have any convictions or
penalties for non-
compliance with legislation
and regulation in South
Africa or abroad (e.g. tax,
competition, collusion etc)
Business partnership model
Financial Market/industry Socio-economic Other
Qualifying criteria
specific to Strategic
Equity Partnership
(partial divestment)
Respondents must
indicate if there is
willingness for equity
participation for Air Chefs’
current management
(This is a non-mandatory requirement)
Respondents must have
more than 5 years’
experience in the current
line of business will be
advantageous but will not
be disqualified
Respondents must be
able to provide specialist
management expertise in
current line of business as
an advantage
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Qualifying criteria
specific for Joint
Ventures
Respondents must be
able to demonstrate
ability to grow the Air
Chefs business (e.g.
international, general
catering)
Respondents must have a
minimum of 3 years’
experience in their current
line of business
Respondents must be
able to provide specialist
management expertise in
current line of business as
an advantage
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Divestment (whole) Potential partners should
indicate how they will
deal with the following:-
oProvide SAA with
competitive pricing
oEnsure and provide
continuous
assurance that Air
Chefs is not asset
stripped
oHow they intend
capitalising Air Chefs
or
oAllow SAA to access
competitive market
Respondents must
indicate if there is
willingness for equity
participation for Air
Chefs’ current
management (This is a non-mandatory requirement)
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Qualifying criteria
Management
Agreement
That they have led and
managed turnarounds
of businesses with a
revenue of more than
R300 million.
Although responses
for all lines of
business are
welcomed,
preference will be
given to businesses
in the airline catering,
restaurants, events,
hospitality, FMCG
and logistics sectors
If not in the above
sectors, strong
consideration will be
given to responses
that clearly shows
innovation regarding
the Air Chefs
business model and/
or complementary
nature and synergies
of business
Respondents must be
prepared to comply
with B-BBEE
legislation
Respondents must not have
any convictions or penalties for
non- compliance with
legislation and regulation in
South Africa or abroad (e.g.
tax, competition, collusion etc)
A plan must be submitted on
how to expedite the company
turnaround with clear
timelines. The following must
be addressed in the plan:
o The time required
to assess the
current business
status.
o Clear plan with
timelines by when
the turnaround will
be achieved with
clear net profit
targets. The plan
should specify a list
of strategic
priorities for
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implementation.
o An assessment of
the current
turnaround
initiatives and
additional initiatives
identified. Current
initiatives to be
validated (Savings
or improvements
through current
identified initiatives
will not be
considered as part
of the proposal).
o Revenue
enhancement
initiatives with clear
deliverables.
Due to the company’s financial
position only proposals that will
not attract additional cost to
SAA and Air Chefs will be
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considered.
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3. Provision of information
Interested parties will be provided with an Information Pack detailing the current state of the
company upon signature of a non-disclosure agreement. Please note that the information in the
pack may be limited to protect Air Chefs confidential and private information. All information
considered confidential and private by Air Chefs will not be disclosed for purposes of proposals
under this RFI.
Information type Documents
Financials Previous 3 year summarised financial statements
(including headcount)
Marketing Basic marketing documents
4. Structure of responses
Interested Parties must clearly demonstrate and address all of the above qualifying
criteria. Responses must be clearly marked with the proposed partnership model. A
separate submission as required in Part B must be made if proposing more than one
business partnership model.
The structure of the responses should be as followings:-
Part A: Provide information regarding the respondents details
Business profile that includes but is not limited to the following:
Name of respondent
Indication of headcount
Services/ Goods provided by the respondent
Markets and industry/ sectors currently being serviced by the respondent
Annual revenues of the respondent
Existing strategic relationships of the respondent
Other interesting facts such as company growth, awards won, innovation
achieved, etc.
Part B: Provide information regarding the proposed business partnership model
Business Partnership proposed:
Nature of the partnership (Joint Venture, Strategic Equity Partnership, Acquisition ,
Management agreement and/ or other (Please explain in detail if proposing other)
Legal structure envisaged
Length of the partnership
Ownership proposal if applicable (indicate revenues and/ or profit splits if not
proposing acquisition)
Description of the business strategy envisaged for the partnership:
Markets and revenues that will accrue,
Operational and Capital costs envisaged,
Strategic and operational risk envisaged and proposed mitigation strategies
Business operating model proposed (where applicable)
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· Governance,
· Management,
· Marketing and Sales e.g. marketing strategy and sales channels,
· Service delivery e.g. production, logistics and other
· Support e.g. Human Resources (HR), Information Technology (IT) and
other
Estimate the net benefits of the partnership model (and indicate the share splits if
proposing joint venture and/or Strategic Equity Partnership or Management
Agreement)
State what the respondent will expect from SAA – kindly provide details
State potential envisaged investment (capital, operational, loans – please indicate
details for the loans such as size, repayment terms, costs, repayment period etc.)
into Air Chefs that will be made by the respondent
For management agreement the following must be addressed in the response:
1. The time required to assess the current business status.
2. Clear plan with timelines by when the turnaround will be achieved with
clear net profit targets. The plan should specify a list of strategic priorities
for implementation.
3. An assessment of the current turnaround initiatives and additional
initiatives identified. Current initiatives to be validated (Savings or
improvements through current initiatives will not be considered as part of
the proposal).
4. Revenue enhancement initiatives with clear deliverables.
Part C: Demonstrate how the respondent meets the minimum qualifying criteria as described in section 3 of this document
Financial (demonstrate qualifying criteria)
Market and Industry (demonstrate qualifying criteria)
Socio Economic including the criteria relating to ownership and B-BBEE as set out
above (demonstrate qualifying criteria)
Other (demonstrate qualifying criteria and any other relevant information to
strengthen the case)
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5. Participation requirements
5.1. Enquiries and perusal of information
Information related to Air Chefs will be supplied in the Information Pack. All other
questions and requests for further information must be sent by e-mail to
[email protected] before 12 February 2016
5.2. Closing date and time
Time: 11:00 South African Time (GMT+2.00)
Date: 16 February 2016
5.3. Method and place of submission
Submissions must be deposited in the tender box situated at the address below. Two (2)
copies and the original must to be submitted.
Alternatively, an electronic copy of the submission can be sent by email to
[email protected] on or before the above mentioned date and time.
Submission address:
Main Reception Gate
SAA Airways Park Jones Road
OR Tambo International Airport
Kempton Park
1627
5.4. Condition of award
NB: No award will be made following this RFI process; however the subsequent request for Proposals (RFP) will be confined to the RFI respondents from which an award may be made.
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SECTION 2: SUPPLIER INFORMATION
(To be completed by Supplier)
Supplier Information
2.1) Name of company: ____________________________
2.2) Company registration number: ________________________2.3) Address of company:
Postal Address: Street Address:
___________________________ ______________________________________________________ ___________________________________________________+___ ___________________________
Company’s internet address:-
2.4) Contact person:
Name: _________________________
Designation: _________________________
Telephone number: _________________________
Fax number: _________________________
2.5) Names of the directors of your company:
Name: Designation:
__________________________ ______________________________
__________________________ ______________________________
2.6) Total number of Employees: ______________________
2.7) Declaration:
The information supplied in this document is correct and complete to the best of my knowledge and accurately reflects the capability of:
(Company name) ___________________
Signature: ________________________ Date:_____________________
Name: ________________________
This RFI is signed in my capacity as: _____________________________________
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SECTION 3: TERMS AND CONDITIONS
(To be read very carefully by supplier)
Standard conditions for Request for Information
1. INTERPRETATION AND DEFINTIONS
1.1 Definitions
The expressions defined below shall have the meanings hereby assigned to
them unless inconsistent with the context of a particular proposal, agreement,
contract or order.
1.1.1 “Company”: South African Airways (SOC) Ltd
1.1.2 “Closing date”: the date and hour specified in the document
2. REQUEST FOR INFORMATION INVITATION
2.1 Request for Information Preparation
All costs in the preparation, presentation and demonstration will be for the
account of the vendor. All supporting documentation and manuals submitted
in response to this request for information will become “company’s” property
unless otherwise stated by the vendor at the time of submission.
2.2 Confidentiality
The information obtained through this request for information will be regarded
as confidential; however, South African Airways (SOC) Ltd does not accept
liability for any information which may become public.
2.3 No binding Agreement
It must be clearly understood that no business will be awarded to any vendor
out of this request for information. Prices submitted with the request for
information are for information only and no vendor will be held to any price
submitted. South African Airways (SOC) Ltd further reserves the right to
contact individual Vendor’s to obtain further information should this be
deemed necessary.
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Responses from this RFI may be used to pre-screen potential bidders for the
RFP process.
2.4 Samples
Vendors may, as part of their response, submit samples, brochures or
documentation of the products supplied by the vendor. Samples, brochures
and documentation submitted will be returned to the vendor only on request.
3. REQUEST FOR INFORMATION DOCUMENTS
3.1 Document requiring completion and return
Vendor’s must complete and submit the following documents as part of their
response:
a) Prescribed request for information documents
b) Any information required in the request for information
3.2 Amendment of documents by South African Airways (SOC) Ltd
South African Airways (SOC) Ltd may, at any time prior to the deadline for
lodging the request for information, amend the documents or extend the time
for lodging documents by notice in writing to the prospective Vendors. (Any
amendments under this clause will become part of the request for
information).
4. PREPARATION OF REQUEST FOR INFORMATION
4.1 Language of document
The request for information and all correspondence and documents related to
the request for information exchanged by the vendor and South African
Airways (SOC) Ltd shall be written in English.
5. SUBMISSION OF REQUESTS FOR INFORMATION
5.1 Address and marking of requests for information
All requests for information must be:
a) Enclosed in a plain envelope or wrapping and clearly marked with the
request for information number specified on the document.
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b) Lodged so as to ensure that they are received not later that the closing
time and date specified for their receipt in accordance with directives
issued with the document.
5.2 Number of copies required
The vendor must submit 2 copies and a soft copy (disc or memory stick).
(Including the original) of each request for information lodged as specified in
the request for information.
5.3 Closing date
All requests for information close on the date and the time indicated in the
document.
5.4 Late tenders
Request for information are late if they are received at the address indicated
in the document after closing time and date. South African Airways (SOC) Ltd
may, at its discretion, consider or refuse to consider any late request for
information.
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