Mango’s business rescue plan must be reworked to suit the South African Airways (SAA) and its ultimate shareholder, the department of public enterprises.
Business rescue practitioner of Opis Advisory, Sipho Sono, said this after the adjournment of a scheduled creditors meeting earlier this week.
The first rescue plan version, which included a proposed restart, is to be shelved as the government refuses to use bailout funds on Mango.
Sono said a restart might only be considered once an investor has been secured to buy Mango.
“The airline will be mothballed for a considerable period as the process of securing an investor will take some time,” he said.
“Accordingly, the amended plan will inevitably have to contemplate a greater number of employees being potentially affected by the restructuring than is the case in the current plan, that was published on October 29, 2021.”
It was agreed at the creditors’ meeting that affected parties will reconvene again in a fortnight after contemplating ditching a restart as part of Mango’s business rescue process.
It looks as though public funds will only be used to settle debt, not drive a going concern.
“This is ultimately a death blow for Mango,” said Wayne Duvenage of the Organisation Undoing Tax Abuse.
“Having gone from motivations to parliament that over R800 million of SAA’s bailout funds be allocated to Mango – because it was integral to SAA’s future plans – to now just a few months later be motivating to dispose of Mango and not using those funds to support its survival smacks of sheer confusion, incompetence and poor management.”
In the meantime, taxpayers wait for an update on the SAA/ Takatso deal announced in June.
The Democratic Alliance’s Alf Lees said Mango’s likely demise might play a role in the deal in which budget airline Lift’s founder Gidon Novick is heading the consortium’s charge in acquiring a majority shareholding in SAA.
“It seems clear Takatso do not want to take over any liabilities that would go along with the taxpayer gift of SAA to them.
“In addition, the Takatso consortium already has a low-cost carrier in its stable and clearly do not need another in the form of Mango. Thus, the need to get rid of Mango and its multibillion-rand liabilities before the gift of SAA to Takatso can be effected.”
Duvenage said there seems to be no clarity in the plans for Mango.
“If there was ever a time to launch an airline in SA it would be at the start of the summer season. That horse has now bolted for Mango.
“Sadly, it is the creditors and staff which suffer the brunt of such poor leadership decisions.”-moneyweb
