top of page

Mango Sale Gets the Green Light from the Supreme Court of Appeal

The business rescuer of Mango Airlines, Mr Sipho Sono, is proceeding with the sale of the state-owned budget carrier to the Ubuntu Aviation Consortium, despite the government's attempt to prevent the sale. The Supreme Court of Appeal (SCA) has dismissed the government's final effort to halt the sale.

Sono has stated that he is now free to proceed with the deal after two Supreme Court of Appeal judges rejected the government's late appeal on March 14th. The appeal was made against a previous High Court order that had compelled a decision on the sale. The appeals court dismissed the petition from the Ministers of Finance and Public Enterprises, the National Treasury, and the Department of Public Enterprises, with costs. The court stated that there was no "reasonable prospect of success in an appeal" and "no compelling reason why the appeal should be granted".

Public Enterprises Minister Pravin Gordhan failed to meet a deadline set by the High Court to decide on the proposed sale as required by the PFMA, which governs such entities. "There's not much the minister can do now, because the PFMA Section 54(3) deeming provision kicked in, and he was deemed to have approved the application. Even if he were to petition the Constitutional Court, it would be academic as courts cannot alter the operation of law. We will now move with speed to implement," Sono said, adding that he would clarify with his lawyers if he needed to wait until April 5, the date he had previously agreed to hold back on signing the Sale of Shares agreement with Ubuntu Air Services. "I've waited over a year to get this far," he reiterated.

Mr. Sono agreed to an offer made by Ubuntu Air Services on August 26, 2022. However, he has been involved in legal disputes with Gordhan for several months now. Gordhan has refused to approve the deal and has demanded more information on the bidder's corporate structure, due diligence conducted on the company, and its business plan. The acquisition is backed by AfricaStay, a family-owned tour operator that markets leisure destinations in South Africa and the Indian Ocean islands, Zanzibar, and Livingstone. According to the company, acquiring Mango is a strategic opportunity to diversify and complement its existing business.

The proposal suggests paying R1,000 rand for the sale of shares and R1 million for share subscriptions. Additionally, Ubuntu Air Services will undertake Mango Airlines' R169 million unflown ticket liabilities, which will be converted into ticket vouchers redeemable over the next 12 months. The plan includes injecting R30 million as start-up and working capital, with an option to add an extra R20 million for guaranteed deposits. Furthermore, Ubuntu Air Services intends to sell an aircraft engine Mango owns for an estimated R3 million, with the proceeds primarily going to creditors. The proposal also involves injecting an additional R100 million into regional and domestic flights. In the future, if the airline becomes sustainable, there's an option to sell 25% to an international airline for additional capital.

Mango Airlines was launched on 30 October 2006, and bookings were made available for purchase at midnight on the same day. The airline's inaugural flight took place on 15 November 2006. Unfortunately, Mango was grounded on 28 April 2021 due to non-payment and debt to the Airports Company of South Africa (ACSA). As a result, no Mango aircraft was permitted to take off or land at any ACSA airport in South Africa from that date. The airline issued an apology statement, but it was unclear whether any of the government funding allocated to its parent company, South African Airways, would be used to provide Mango with a bailout. Despite the anticipation for a possible resumption of operations, Mango never resumed its services. In August 2022, the South African Civil Aviation Authority suspended the airline license for a minimum of two years.



bottom of page