The business rescue practitioner (BRP) for Mango Airlines has warned that the group may have to abandon its rescue plan and start winding down proceedings.
Picture: Getaway gallery
‘Given this sudden turn of events, however, there is now the possibility that the transaction or investor process contemplated in the rescue plan may have to be abandoned and for the BRP to implement the wind-down process already incorporated in the adopted business rescue plan,’ the group said according to BusinessTech.
Mango was placed in voluntary business rescue on 28 July 2021, with business rescue practitioners appointed in August of that year. The group was allocated R819 million to execute a rescue strategy, which involved reducing operations and cutting staff. Ultimately, all staff were either given severance packages, retrenched, or resigned.
As part of the business rescue plan, the government, through the Department of Public Enterprises (DPE), wants to dispose of its shareholding in the group and have the airline snapped up by private investors.
However, the BRP said that holdups from Mango’s main shareholder – the government – may make this impossible.
‘We understand that the Minister wrote to SAA on or about 20 December 2022, expressing a view that he was not completely satisfied with the responses to the queries raised by SAA,’ the BRP said.
‘We further understand that SAA was also meant to receive a letter from National Treasury, communicating National Treasury’s view that the application will have to be resubmitted directly to National Treasury, and until that happens, National Treasury does not believe that the submission of the Application to DPE is complete,’ the BRP said.
Mango’s position is complicated by the group having had its air licenses suspended in August 2022 for two years after it remained grounded beyond the 12-month grace period afforded by the Air Services Licensing Council.
South Africa’s airline industry has been hit with several high-profile liquidations over the last year, with both Comair (Kulula) and SA Express being shut down.
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