South African Airways Act

Link to law: http://www.gov.za/documents/south-african-airways-act
Published: 2007-06-27

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South African Airways Act [5 of 2007]


Government Gazette
REPUBLIC OF SOUTH AFRICA

Vol. 504 Cape Town 27 June 2007 No. 30012
THE PRESIDENCY No. 524 27 June 2007
It is hereby notified that the President has assented to the following Act, which is hereby published for general information:–
No. 5 of 2007: South African Airways Act, 2007

2 No. 30012 GOVERNMENT GAZETTE, 27 JUNE 2007
Act No. 5, 2007 SOUTH AFRICAN AIRWAYS ACT, 2007
GENERAL EXPLANATORY NOTE:
[ ] Words in bold type in square brackets indicate omissions from existing enactments.
^ ^ ^ ^ _ ^ ^ ^ ^ _ Words underlined with a solid line indicate insertions in existing enactments.
(English text signed by the President.) (Assented to 14 June 2007.)
ACT To provide for the transfer of the shares of Transnet Limited in South African Airways (Proprietary) Limited to the State; to provide for the conversion of South African Airways (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
Since the Republic's rapidly developing economy requires reliable and extensive air transport capacity;
And since the State desires to promote air links with the Republic's main business, trading and tourism markets within the African continent and internationally;
And since the State has a developmental orientation and regards South African Airways as a national carrier and strategic asset that would enable the State to preserve its ability to contribute to key domestic, intra-regional and international air linkages, the State intends to retain it as a national carrier,
BE IT THEREFORE ENACTED by the Parliament of the Republic of South Africa, as follows:— Definitions
1. In this Act, unless the context indicates otherwise— "Companies Act" means the Companies Act, 1973 (Act No. 61 of 1973); "conversion date" means the date on which the conversion of South African Airways (Pty.) Ltd. into a public company is registered in terms of section 4(3); "Legal Succession Act" means the Legal Succession to the South African Transport Services Act, 1989 (Act No. 9 of 1989); "Minister" means the Minister responsible for Public Enterprises; "PFMA" means the Public Finance Management Act, 1999 (Act No. 1 of 1999); "SAA" means South African Airways (Pty.) Ltd. and, with effect from the conversion date, South African Airways Ltd.; "SAA claims" means all amounts owing by SAA to Transnet as at midnight on the day immediately preceding the transfer date;
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Act No. 5, 2007 SOUTH AFRICAN AIRWAYS ACT, 2007
"SAA interests" means those SAA 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 SAA interests; "SAA shares" means all the shares in the capital of SAA of which Transnet is, immediately before the transfer date, the registered and beneficial owner; 5 "South African Airways Ltd." means South African Airways Limited, a public company duly incorporated in terms of the Companies Act; "South African Airways (Pty.) Ltd." means South African Airways (Proprietary) Limited, a private company duly incorporated in terms of the Companies Act; "State" means the Government of the Republic of South Africa acting through the 10 Minister; "this Act" includes any regulation made 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 15 section 2 of the Legal Succession Act.
Objects of Act
2. The objects of this Act are to provide for— (a) the transfer of SAA shares and SAA interests from Transnet to the State; (b) the conversion of South African Airways (Pty.) Ltd. into a public company 20
with share capital; and (c) the listing of SAA as a major public entity in Schedule 2 to the PFMA.
Transfer of SAA shares and SAA interests
3. (1) The Minister and Transnet, with the concurrence of the Minister of Finance, must determine by agreement— 25
(a) which SAA claims and which assets, liabilities, rights or obligations of Transnet in connection with SAA constitute SAA interests; and
(b) the consideration payable for the transfer of SAA shares and SAA interests to the State.
(2) In the absence of an agreement between the Minister and Transnet on any matter 30 referred to in subsection (1) that matter must be finally determined by the Minister, with the concurrence of the Minister of Finance.
(3) With effect from the transfer date— (a) the State becomes the shareholder and member of SAA; and (b) the Minister exercises all the rights attaching to SAA shares and SAA interests 35
on behalf of the State, including the rights as shareholder and member of SAA.
Conversion of South African Airways (Pty.) Ltd. into public company
4. (1) After the transfer date, the Minister may on behalf of the State request the Registrar of Companies in writing to convert South African Airways (Pty.) Ltd. into a 40 public company having a share capital in accordance with the Companies Act.
(2) The request must be accompanied by the memorandum of association and articles of association of the intended public company that must be—
(a) framed in accordance with the Companies Act, but subject to this Act; and (b) signed by the Minister on behalf of the State. 45
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Act No. 5, 2007 SOUTH AFRICAN AIRWAYS ACT, 2007
(3) On receipt of the request and the memorandum and articles so signed the Registrar of Companies must—
(a) register the conversion of South African Airways (Ply.) Ltd. into a public company having a share capital, as well as the memorandum and articles; and
(b) issue an amended certificate of incorporation. 5 (4) The name of the public company referred to in subsection (3)(a) is South African
Airways Limited. (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). 10
(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.
(7) Sections 32, 44(1), 54(2), 66, 190 and 344(d) of the Companies Act do not apply 15 to South African Airways Ltd. for so long as the State holds 75 per cent or more of the total issued ordinary shares in the Company.
Effect of conversion
5. The conversion contemplated in section 4(1) does not affect— (a) the continued corporate existence of SAA under the Companies Act; 20 (b) any rights, liabilities or obligations acquired or incurred by SAA before the
conversion date; or (c) the terms and conditions of service of any employee of SAA.
Objects and powers of SAA
6. (1) The main object of SAA is to engage in passenger airline and cargo transport 25 services, air charter services and other related services.
(2) For the purposes of section 33(1) of the Companies Act, none of the objects ancillary to the main object of SAA is excluded.
(3) The powers of SAA are as set out in Schedule 2 to the Companies Act.
Borrowing powers of SAA 30
7. Subject to the PFMA, SAA may borrow money or issue a guarantee, indemnity or security, or enter into any transaction necessary to achieve its object referred to in section 6.
Regulations
8. The Minister may, by notice in the Gazette, make regulations regarding any 35 ancillary or incidental administrative or procedural matter that it is necessary to prescribe for the proper implementation or administration of this Act.
Amendment of law
9. With effect from— (a) the transfer date, the PFMA is hereby amended by the insertion in Schedule 2 40
after item 16 of the following item: "16A. South African Airways (Proprietary) Limited"; and
(b) the conversion date, the PFMA is hereby amended by the substitution in Schedule 2 for item 16A of the following item:
"16A, South African Airways Limited". 45
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Act No. 5, 2007 SOUTH AFRICAN AIRWAYS ACT, 2007
Short title and commencement
10. This Act is called the South African Airways Act, 2007, and comes into operation on a date determined by the President by proclamation in the Gazette.