PHASE THREE – CONSULTATIVE DRAFT
11 SEPTEMBER
2007
ü Indicates provisions that
were adopted
[ ] Indicates provisions that were
partially adopted
( ) Indicates notes by DPE
SOUTH AFRICAN EXPRESS BILL
(As
introduced in the National Assembly (proposed section 75); explanatory summary
of
Bill
published in Government Gazette No. 29879 of 11 May 2007)
(The
English text is the offıcial text of the Bill)
(MINISTER FOR PUBLIC
ENTERPRISES)
[B 14—2007] ISBN 978-1-920200-87-9
No. of copies printed ....................................
1 800
BILL
üTo
provide for the transfer of shares, loan accounts, liabilities and guarantees
in South African Express (Proprietary) Limited from Transnet Limited to the
State; to provide for the main
objects and powers of South African Express (Proprietary) Limited; to provide for the borrowing
powers of South African Express (Proprietary) Limited; 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,
1973; and
to provide for matters connected therewith.
PREAMBLE
üSINCE
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;
üAND
SINCE the State desires to contribute to the expansion of
regional air service capability within
BE IT THEREFORE ENACTED by the Parliament of the
as
follows:—
Definitions
1.In
this Act, unless the context indicates otherwise—
ü‘‘Companies
Act’’ means the Companies Act, 1973 (Act No. 61 of 1973);
ü‘‘conversion
date’’ means the date on which the conversion of South African Express
(Propriety) Limited into a public company is registered in terms of section 46(1);
ü‘‘Legal
Succession Act’’ means the Legal Succession to the South African Transport
Services Act, 1989 (Act No. 9 of 1989);
ü‘‘Minister’’
means the Minister responsible for Public Enterprises;
ü‘‘SAX’’
means South African Express (Proprietary) Limited and, with
effect from the conversion date, South African Express Limited;
ü‘‘SAX
claims’’ means all amounts owing by SAX to Transnet as at midnight
on the day immediately before the transfer date;
ü‘‘SAX
interests’’ means those SAX claims and assets, liabilities, rights or obligations
determined in terms of section 3(1)(a) or
section 3(2), as the case may be, to constitute SAX interests;
ü‘‘SAX
shares’’ means all the shares in the capital of SAX of which
Transnet is, immediately before the transfer date, the registered and
beneficial owner;
ü‘‘South
African Express Limited’’ means South African Express Limited,
a public company duly incorporated in terms of the Companies Act;
ü‘‘South
African Express (Proprietary) Limited’’ means
South African Express (Proprietary) Limited, a private company duly
incorporated in terms of theCompanies Act;
ü‘‘State’’
means the Government of the
ü‘‘this
Act’’ includes any regulation in terms of section 8;
ü‘‘transfer
date’’ means the date on which the transfer of shares and claims
is finalised under an agreement between Transnet and the State;
ü‘‘Transnet’’
means Transnet Limited, a company duly incorporated in
terms of section 2 of the Legal Succession Act.
Objects
of Act
2. The
objects of this Act are to provide for—
ü(a) the
transfer of SAX shares and SAX interests from Transnet to the State;
ü(b) the main objects and powers of SAX;
ü(c) the
borrowing powers of SAX; andand
ü(bd) the
conversion of South African Express (Proprietary) Limited into a public company
with share capital.
Transfer
of SAX shares and SAX interests
3.ü (1)
The Minister and Transnet, with the concurrence of the Minister of Finance, must
determine by agreement—
ü(a) which
SAX claims and which assets, liabilities, rights or obligations of Transnet
in connection with SAX constitute SAX interests; and
ü(b) the
consideration payable for the transfer of SAX shares and SAX interests to the
State.
ü(2)
If the Minister and Transnet cannot agree on any matter referred to in subsection
(1),
that matter must be finally determined by the Minister, with the concurrence of
the Minister
of Finance.
ü(3)
With effect from the transfer date—
ü(a) the
State becomes the sole shareholder and member of SAX; and
ü(b) the
Minister exercises all the rights attaching to SAX shares and SAX interests on
behalf of the State, including the rights as shareholder and member of SAX.
Main
objects
and powers of SAX
64. ü(1)
The main objects of SAX is are to promote
frequency of services on lower destiny routes and to
expand regional air services capability by engage inproviding the transportation of
passengers, cargo and mail, air
charters and other related aviation services in the Republic and to the African
continent and the surrounding islands.
ü(2)
For the purposes of section 33(1) of the Companies Act, none of the objects ancillary
to the main objects of SAX is are excluded.
[(3)
The powers of SAX include common powers contained are as set
out in Schedule 2 to the Companies Act and none of those powers are
excluded or qualified.]
(Partially adopted – subject to rewording)
Borrowing
powers of SAX
75.ü Subject
to the Public Finance Management Act, 1999 (Act No. 1 of 1999), SAX may
borrow money, issue a guarantee, indemnity or security or enter into any transaction
necessary to achieve its object referred to in section 64.
Conversion
of South African Express (Proprietary) Limited into public company
46. ü(1)
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.
ü(2)
The request must be accompanied by the memorandum of association and articles of
association of the intended public company that must be—
ü(a) framed
in accordance with the Companies Act, but subject to this Act; and
ü(b) signed
by the Minister on behalf of the State.
ü(3)
On receipt of the request and the memorandum and articles so signed, the Registrar
of Companies must—
ü(a) register
the conversion of South African Express (Proprietary) Limited into a public
company having a share capital, as well as the memorandum and articles;
and
ü(b) issue
an amended certificate of incorporation.
ü(4)
The name of the public company referred to in subsection (3)(a) is South African Express
Limited.
ü(5)
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).
ü(6)
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.
ü(7)
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
57. üThe
conversion contemplated in section 46(1) does not
affect—
ü(a) the
continued corporate existence of SAX under the Companies Act;
ü(b) any
rights, liabilities or obligations acquired or incurred by SAX before the conversion
date; or
ü(c) the
terms and conditions of service of any employee of SAX.Main object and powers of SAX
6. (1) The
main object of SAX is to engage
in the transport of passengers, cargo and
mail, air
charters and other related aviation services in the Republic and to the African
continent
and the surrounding islands.
(2) For the
purposes of section 33(1) of the Companies Act, none of the objects
ancillary
to the main object of SAX is excluded.
(3) The
powers of SAX are as set out in Schedule 2 to the Companies Act.
Borrowing
powers of SAX
7. Subject to
the Public Finance Management Act, 1999 (Act No. 1 of 1999), SAX
may borrow
money, issue a guarantee, indemnity or security or enter into any
transaction
necessary to achieve its object referred to in section 6.
Regulations
88. üThe
Minister may, by notice in the 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.
Amendment
of laws
9. With effect
from—
(a) the
transfer date, the Public Finance Management Act is hereby amended by the
insertion in Schedule 2 after item 11 of the following item:
‘‘11A. South
African Express (Proprietary) Limited’’; and
(b) the
conversion date, the Public Finance Management Act is hereby amended by the
substitution in Schedule 2 for item 11A of the following item:
‘‘11A. South
African Express (Proprietary) Limited’’. (Not adopted – to be discussed)
Short
title and commencement
910.ü This
Act is called the South African Express Act, 2007, and comes into operation on
a date determined by the President by proclamation in the Gazette.
MEMORANDUM ON THE OBJECTS OF THE
SOUTH
AFRICAN EXPRESS BILL, 2007
1.
BACKGROUND
1.1
In 2004 the Minister for Public Enterprises approved the disposal of
non-freight
assets from Transnet Limited (‘‘Transnet’’). The Minister has
agreed
with Transnet to transfer Transnet’s entire shareholding, including
claims
in and to South African Express (Proprietary) Limited (‘‘SAX’’), to the
State
in terms of a share sale agreement. This agreement is subject to the
fulfilment
of certain suspensive conditions, which include the passing of any
legislative
mandate required to implement the transfer. The Bill
is part of such
legislative
mandate.
1.2
The Bill seeks to create flexibility for funding and private sector involvement
by
providing for 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 of the Bill are to provide for—
2.1 the transfer of SAX shares and interests from Transnet
to the State;
2.2 the main objects and powers of SAX;
2.3 the borrowing powers of SAX; and
and
2.2 4 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;
•
Transnet and SAX.
4.
FINANCIAL
The
financial implications for the State will be in respect of 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
1996,
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 18(1)(a)
of
the Traditional Leadership and Governance Framework Act, 2003 (Act No.
41 of
2003), since it contains no provisions pertaining to customary law or
customs
of traditional communities.
5
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ISBN
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