SOUTH AFRICAN EXPRESS
ENABLING BILL
(As introduced in the National
Assembly (proposed as section 75): explanatory summary of Bill published in
Government Gazette No. 0000 of [insert date])
(The English text is the
official text of the Bill)
(MINISTER OF PUBLIC
ENTERPRISES)
[B – 2007]
BILL
To provide for the
transfer of shares, loan accounts, liabilities and guarantees from Transnet
Limited in South African Express (Proprietary) Limited to the State, to provide
for the conversion of South African Express (Proprietary) Limited into a public
company having a share capital incorporated in terms of the Companies Act,
1961; and to provide for matters connected therewith.
Preamble
Since retaining South
African Express as a strategic asset would enable the State to preserve its
ability to provide frequency of services on lower density routes;
And since the State desires
to contribute to the expansion of regional air service capability within
BE IT THEREFORE ENACTED by the Parliament of the
Definitions
In this Act, unless the
context otherwise indicates-
"Companies Act"
means the Companies Act, 1973 (Act No. 61 of 1973);
"conversion
date" means the date determined by the Minister in terms of the provisions
of section 4(1);
"Legal Succession
Act" means the Legal Succession to the South African Transport Services
Act, 1989 (Act No.9 of 1989);
"Minister" means
the Minister of Public Enterprises;
"Prescribed"
means prescribed by Regulation in terms of section 8;
"PFMA" means the
Public Finance Management Act, 1999 (Act No.1 of 1999);
"SAX" means South
African Express (Proprietary) Limited, and with effect from the conversion
date, South African Express Limited;
"SAX claims"
means all amounts owing by SAX to Transnet as at
"SAX interests"
means such of the SAX claims and any other assets,
liabilities, rights or obligations of Transnet as are determined pursuant to
section 3(1)a) or, if applicable, determined under section 3(2);
"SAX shares"
means all the shares in the capital of SAX of which Transnet is, on the day
preceding the transfer date, the registered and beneficial owner;
"South African Express
Limited" means South African Express Limited, a public company duly
incorporated in terms of the Companies Act;
"South African Express
(Proprietary) Ltd" means South African Express, a private company duly
incorporated in terms of the Companies Act;
"State" means the
Government of the
"this
Act" includes any Regulation in terms of section 8;
"transfer
date" means the date on which the transfer of the shares and claims is
finalised under the agreement between Transnet and the State.
"Transnet" means
Transnet Limited, a company duly incorporated in terms of section 2 of the
Legal Succession Act;
Objects of Act
The objects of this Act are
to provide for—
(a) the
transfer of the SAX Shares, the SAX Interests and the SAX claims from Transnet
to the State; and the conversion of South African Express (Proprietary) Limited
into a public company with share capital.
Transfer of SAX shares
and SAX interests
The Minister
and Transnet, with the concurrence of the Minister of Finance, must determine
by agreement—
which of the SAX claims and which assets, liabilities, rights or obligations
of Transnet in connection with SAX constitute the SAX interests; and
the consideration payable for the
transfer of the SAX shares and the SAX interests to the State.
In the absence of an agreement
between the Minister and Transnet on any matter referred to in section 3(1),
that matter must be finally determined by the Minister, with the concurrence of
the Minister of Finance.
With effect from the
transfer date—
the State becomes the shareholder and
member of SAX; and
the Minister shall exercise all of the
rights attaching to the SAX shares and SAX interests, on behalf of the State,
including the rights as shareholder and member of SAX.
Objects and powers of
SAX
The
main object of SAX is to engage in passenger airline and cargo transport
services, mail, air charter and other related aviation services in
For
the purposes of section 33(1) of the Companies Act, none of the objects
ancillary to the main objects of SAX are excluded.
Borrowing powers of SAX
Subject to the PFMA, SAX
may borrow money or issue a guarantee, indemnity or security, or enter into any
transaction necessary to achieve its objects referred to in section 4.
Conversion of South
African Express (Proprietary) Limited into a public company
After the transfer date,
the Minister may on behalf of the State request the Registrar of Companies in
writing to convert South African Express (Proprietary) Limited into a public
company having a share capital in accordance with the Companies Act.
The request must be
accompanied by the memorandum of association and articles of association of the
intended company that must be –
framed in accordance with the Companies
Act, subject to this Act: and
signed by the Minister on behalf of the
State
On receipt of the request
and the memorandum and articles so signed, the Registrar of Companies must –
register the conversion of
South African Express (Pty) Ltd. Into a public company having a share capital,
as well as the memorandum and articles; and
issue an amended certificate of
incorporation
The name of the public
company referred to in subsection (3) (a) shall be South African Express
Limited
No additional fee referred
to in section 63 (2) of the Companies Act is payable in respect of the
registration of the memorandum and articles referred to in subsection (3) (a).
The Registrar of Companies
must issue such directives and authorise such deviations from the regulations
in force in terms of the Companies Act and the documents prescribed in terms
thereof as he or she may consider necessary in order to give effect to this
section.
Sections 32, 44(1), 54(2),
66, 190 and 344(d) of the Companies Act do not apply to South African Express
Limited for so long as the State holds 75 per cent or more of the total issued
ordinary shares in the Company.
Effect of conversion
The conversion contemplated
in section 6(1) does not affect—
the continued corporate existence of
SAX under the Companies Act;
any of the rights, liabilities or
obligations acquired or incurred by SAX before the conversion date; or
the terms and conditions of service of
SAX employees.
The Minister may, by notice
in the Government Gazette, make regulations regarding any ancillary or
incidental administrative or procedural matter that it is necessary to
prescribe for the proper implementation or administration of this Act.
Short title and
commencement
This Act is called the
South African Express Act, 2006 and comes into operation on a date determined
by the President of the
MEMORANDUM ON THE
OBJECTS OF THE
SOUTH AFRICAN EXPRESS
BILL
1. BACKGROUND
1.1 In 2004 the Minister approved the disposal of non-freight
assets from Transnet Limited ("Transnet") as part of Transnet’s new
four-point turn around strategy. The Minister of Public Enterprises has agreed
with Transnet to transfer Transnet’s entire shareholding, including claims in
and to SAX in terms of a share sale agreement. This agreement will be subject
to the fulfilment of certain suspensive conditions, which will include the
passing of any legislative mandate required to implement the transfer. The SAX
Bill is part of such legislative mandate.
1.2 The Bill provides flexibility for funding and private sector
involvement as well as the possibility that SAX may be converted into a public
company. Public companies are generally recognised as the optimal corporate
form to access capital markets and enable future private sector investment,
where necessary.
2. OBJECTS
The objects sought to be
achieved through the enactment of the Bill are to provide for–
the transfer of the SAX shares,
interests and claims from Transnet to Government; and
the conversion of SAX into a public
company with share capital.
3. Bodies consulted
The Department of Public
Enterprises has consulted -
National Treasury;
Department of Transport;
and
Transnet
and SAX.
4. Financial implications for State
The financial implications
for the State of the proposed statute will be through providing guarantees to
various third party lenders and entities such as the International Licensing
Council and replacing Transnet as the present guarantor.
5. Parliamentary procedure
5.1 The State Law Advisers and the Department of Public
Enterprises are of the opinion that this Bill must be dealt with in accordance
with the procedure established by section 75 of the Constitution of the
Republic of South Africa ("the Constitution") since it contains no
provision to which the procedure set out in section 74 or 76 of the
Constitution applies.
5.2 The State Law Advisers are of the opinion that it is not
necessary to refer this Bill to the National House of Traditional Leaders in
terms of section 1(1)(a) of the Traditional Leadership and Government Framework
Act, 2003, (Act. No.41 of 2003), since it does not contain provisions
pertaining to customary law or customs of traditional communities.