Govt has not yet received its dividend from Airlink

By Ntombi Mhlongo and Phephile Motau

The wait continues for the Government of the Kingdom of Eswatini as far as receiving its shares from the defunct Eswatini Airlink Joint Venture is concerned. In April this year, it was announced that the Eswatini Airlink, a joint venture between the Kingdom of Eswatini and Airlink South Africa will cease operations in June. This was after the parties mutually agreed to dissolve the 23-year-old joint venture which came after the government’s re-establishment of a wholly-Eswatini owned national airline, Eswatini Air, the new regional airline brand of the Royal Eswatini National Airways (RENAC).

In 1999, the Government of the Kingdom of Eswatini entered into an agreement with Airlink (PTY) Ltd to establish an Airline operation company, and the joint venture was named Eswatini Airlink. 

In the business deal, the Eswatini Government held 51 per cent of the shares and the remainder was held by Airlink (PTY) Ltd. 

The business mainly operated a commercial passenger service between Eswatini (Matsapha Airport and later King Mswati III International Airport) and OR Tambo airport in Johannesburg. 

Giving feedback on the issue, Minister of Public Works and Transport Chief Ndlaluhlaza Ndwandwe recounted that through RENAC, the Government of Eswatini decided to revive the national carrier and this was in breach of the provisions of the shareholders’ agreement establishing Eswatini Airlink. 

He said the shareholders engaged and resolved to reach an amicable settlement of the issue through a dissolution of the airline operation business, and the result would be that Airlink would now operate the Eswatini – Johannesburg route on their own. 

The termination of the shareholding was based on the premise that before the commencement of the scheduled operation, the interest of the Eswatini Government would have ceased to exist, hence May 31, 2022, was considered as the last day of business of the joint venture. 

“The process has been going smoothly by taking care of the liabilities (including staff terminal benefits and other liabilities of the joint venture) thus remaining with a distributable dividend among the parties,” he said.

He explained that the final transfer of funds is yet to occur as all the parties have concluded the discussions. 

With regards to the value of the shares, he said it was decided that the shares be transferred at nominal value in the spirit of the discussions that led to the dissolution of the company. 

“The conclusion of the transaction in this manner has paved way for the commencement of the commercial operation of the national carrier without the need for legal recourse from the parties,” highlighted the minister.

He noted that in the two years before the final decision to cease the shareholding, business performance suffered a huge knock due to the Covid -19 pandemic, however, the company continued to exist despite drawing significantly from the reserves. 

He said the final report of the transaction is yet to be tabled to Cabinet, hence details of the amounts involved will not be divulged at this stage. 

“However, with the conclusion of the transfer of funds in the coming weeks, this information will be available for public consumption,” assured the minister.

Meanwhile, RENAC recently announced that Eswatini Air’s systems are ready to go live as soon as the Air Operator Certificate (AOC) is issued and that the two aircraft to be used for the operation are both serviceable and ready to commence operations.

The entity stated that the date for the commencement of operations will be announced after the AOC issuance.

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