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Court application by Mango Airlines' Business Rescue Practitioners - The Saga Continues

The débâcle over Mango Airlines' future continues in a recent action Mr Sipho Sono, Mango Airlines’ Business Rescue Practitioner, has lodged a court application against the Minister of Public Enterprises and SAA regarding the processes governing the disposal of SAA’s shares in Mango to the investor identified by the BRP.

Mr Sono is asking the court to compel the Minister to approve the sale of Mango as a matter of urgency. He further complains about requests for details such as the identity and the commercial capability of the BRP’s preferred bidder.

Mango is a subsidiary of SAA, a state-owned enterprise, as such, the Board of SAA is bound by an agreement with the Minister of Public Enterprises that is explicit that the Minister has the right to seek as much information as necessary for him to act responsibly in supporting an asset disposal application. Therefore, SAA has taken the stance that the Minister is within his right to declare his dissatisfaction with the quality of information from Mr Sono to support the transaction for the sale of Mango.

Mango was placed in business rescue in July 2021 with the expectation that the process would last no more than six months. The Mango BR process turned out to be a frustratingly protracted and expensive ordeal. Mr Sono has announced preferred investors a number of times before but, according to SAA, failed to furnish sufficient details. He would refuse to disclose to SAA and DPE the names of these preferred bidders even though Mango shares are SAA’s property, SAA said in a statement. SAA feel they are within its rights to know the identity of the bidders. In the final instance, when a bidder was eventually disclosed to SAA, they claimed to have identified “a reasonable material conflict”, this present dispute erupted around the nature of the due diligence required on the now-restructured prospective investor and their business plan.

SAA supported and facilitated the resolution of the Board of Mango to place the airline in voluntary business rescue in 2021. This step was actively supported by all labour organisations at Mango as the airline could not service its active debt of R2.85 billion from its operations.

SAA and the DPE have inserted well over R800-million to ensure a successful rescue of Mango. SAA has voted along with all the Mango creditors that this rescue should entail the sale of shares to an investor with the capability to restart the airline. In addition to the funds mentioned above, if Mango is wound down, SAA is liable for the R80-million guarantee issued in favour of the Air Services Licensing Council for passenger protection liability.

SAA holds that the requests for further information on the proposed investor by the Minister are legitimate. Professor John Lamola, SAA’s Interim Chairman and CEO affirms that “SAA supports the Minister and the DPE in their opposition of Mr Sono’s court application and will continue with its search and demand for the information required to complete the PFMA application for SAA’s Mango’s proper disposal”.



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