Safair has announced the conclusion of its full Broad-Based Black Economic Empowerment (BBBEE) transaction – NdizaSafair Employee Trust - shifting the shareholding dynamics of the company.
By changing its shareholding, the airline moves forward in its reapplication for a permit to operate scheduled passenger services.
A court interdict was filed against Safair in October, preventing it from launching low cost carrier FlySafair in South Africa over allegations that it did not meet the foreign ownership legal requirements where only 25% of an airline can be foreign-owned. Comair and Skywise have claimed that because one of the shareholders, Hugh Flynn, does not live in South Africa he did not form part of the 75% local-ownership.
According to ceo of Safair Dave Andrew, as part of the BBBEE deal, the shares previously held by Hugh were repurchased, removing any possible concern about foreign shareholding.
Elmar Conradie and Dave have also consolidated their shareholding into an investment vehicle, the Safair Investment Trust. Wimpie Davidson, the airline's operations director, has become an investor of the trust.
The result is that Safair now has one class of ordinary shares with no differences in economic or voting rights, says Dave.
“Further, we are extremely proud to say that Safair is the first aviation company in South Africa to have set up such an extensive and full Employee Share Ownership Plan (ESOP) for staff. While other aviation companies may have something similar, their shareholder percentages represented are smaller in comparison to their workforce," he adds.
The ESOP allows all existing and future previously disadvantaged permanently employed staff members of Safair the opportunity to participate in the growth and ownership of the airline.
Comair has objected to the airline’s reapplication for a license based on the fact that Safair already has a scheduled air service license which is currently the subject of a High Court Application brought by Comair and Skywise to review the licensing decision.
Comair ceo, Erik Venter says: “Safair has applied for another license which we believe is premature as we are still awaiting the outcome of the legal objection against the existing license. We have a responsibility towards our investors, our customers and our staff and we are persisting with our efforts to ensure that the legislative requirements relating to the foreign ownership of airlines are complied with, so that foreign entities cannot set up fronting schemes in order to circumvent our laws and gain access to the South African market.”
Skywise ceo Rodney James told TNW recently: “It’s interesting how they can change their shareholding overnight to try and satisfy the legal requirements of domestic air service ownership and control.” He added: “A paperwork shuffle for the creation of yet another front, perhaps.” (See TNW, November 27)
Erik adds: "It does appear odd that the company that intended to start up this airline would just hand over control and financial benefit to other parties. How are the new shareholders going to fund the airline?"
