NdizaSafair BBBEE ESOP Presentation

Transcription

1 NdizaSafair For the love of our people BBBEE ESOP Presentation CAA Inaugural Aviation Industry Growth and Safety Conference

2 Safair ownership history. - Originally established in 1965 as Trop Air - Acquired by the Safmarine group in 1969, name changed to Safair Freighters Pty Ltd - In November 1994, following the exit from the scheduled freight market, name changed to Safair Pty Ltd. - In 1998 acquired by Imperial Holdings group. - In 2008 acquired by Aergo Capital, name change to Safair Operations Pty Ltd ASL Aviation Group acquired Aergo s 25% interest BBBEE shareholding transaction

3 Background - Having been previously compliant, from a BEE perspective whilst part of the Imperial group, this situation had changed following the Aergo and ASL involvement. - Following our AOC renewal in 2011 and 2012 an undertaking was given to the CAA to address our BEE status. - Process commenced to find suitable investors / partners. - After considerable process and investigation a number of key factors emerged: - Limited potential partners that had aviation experience or benefit that they could contribute. - None of the potential partners were able or willing to finance the acquisition. In summary: If we were going to have to fund the proposed transaction or give it away then why not rather benefit our own employees.

4 Background Hence our decision to proceed with an Employee Share Ownership Plan - Ndiza Safair. This broad-based black economic empowerment transaction, allows us to: empower our employees to participate in the share ownership of Safair; enhance Safair s ability to attract and retain black employees (as defined in the Broad Based Black Economic Empowerment Act No. 53 of 2003); promote the continued growth of Safair; and enhance the transformation of Safair. Employee Share Ownership Plan ( ESOP )

5 Background The ESOP allows: existing and future black employees of Safair to participate in the ownership of Safair. other employees may also participate in the ESOP, but only to the extent that the majority of the benefits of the ESOP (at least 51% of the benefits) will always vest in and accrue to black employees of Safair.

6 Establishment of the Trust Safair registered the NdizaSafair Employee Trust ( the Trust ) on 10 October Safair donated the required purchase consideration to the Trust: which amount was utilized to subscribe for 100% of the issued share capital in NdizaSafair Proprietary Limited ( NdizaSafair ). NdizaSafair utilized the proceeds received to subscribe for: 25.14% of the issued shares in Safair 1 preference share in Safair for a price equal to the then current market value (based on a formula) of such shares. this will entitle NdizaSafair to 5% of Safair s profits after tax.

7 Ownership Structure Black Employees Other Employees >51% <49% NdizaSafair Employee Trust NdizaTrust 100% Capital Proceeds NdizaSafair (Proprietary) Limited NdizaSafair 25.1% Safair Operations (Pty) Ltd Dividends Ordinary + 5% preference

8 How does it work? 51% of the benefits of the Trust must be allocated to black employees of Safair. All participants must be a SA citizen and resident. Allocation of units was based on years of service, rather than reference to salary or remuneration. Each beneficiary was allocated a number of Trust Units in the Trust. Safair will determine the number of additional Trust Units to be allocated per year. The beneficiaries will share in the dividends and capital growth of Safair proportionate to the number of Trust Units that have been allocated to them.

9 What are the benefits? The Trust will effectively own 25.14% of the issued shares in Safair and will receive all the benefits that any other shareholder would receive from owning a share in Safair. The Trust will have no debt and all of the benefits of the Trust will accrue to beneficiaries of the Trust. Safair will pay at least 5% of its after tax profits to the Trust, by way of the preference share, the only requirement is that Safair must have profits and cash to pay the dividend. In addition, the trust can receive up to 25.14% of after tax profits- by way of dividends. The dividends and any proceeds on the sale of Safair shares received by the Trust will be distributed to the beneficiaries.

10 Who administers the Trust? 2 Safair Trustees (appointed by Safair ) 4 Trustees 2 Elected Trustees (appointed by the beneficiaries of the Trust) remain in office for a period of 2 years will be appointed by the beneficiaries from a list of beneficiary nominations presented by the Trustees and Safair, on the basis that such nominations should preferably be black persons. - Following initial implementation of the ESOP, all employees were entitled to elect their two representatives who have now been appointed as Trustees and Directors on Ndiza Safair. - One of the elected representatives is then also appointed as a director on Safair Operations board, currently Mr Elyaas Parker.

11 Administration continued. Beneficiaries of the Trust may sell their Trust Units to other beneficiaries of the Trust (by using a prescribed process and certain limitations apply). Checks have also been put in place to avoid exploitation of lower income employees, i.e. all sales transaction are by way of auction not individual sales. Various rules have been established as to how the members units are handled at retirement, resignation, or dismissal.

12 Summary By implementing the ESOP we have not only ensured our BBBEE requirements but most importantly we have engaged all our employees as equity partners in our business, thus ensuring that our employees : Are committed to stay with the company long term staff retention, and Remain bottom line focused - do your part to make sure that SAFAIR makes money and YOU will make money!

13 Thank you for your attention.