Mango’s business rescue plan needs to be reworked to suit South African Airways (SAA) and its ultimate shareholder, the public companies department.
Opis Advisory business rescue practitioner Sipho Sono said this after adjourning a creditor meeting scheduled earlier this week.
Join heated discussions with the Moneyweb community and get full access to our market indicators and data tools while supporting quality journalism.
R63/month or R630/year
You can cancel anytime.
The first version of the rescue plan, which included a proposed restart, will be shelved as the government refuses to use rescue funds in Mango.
Sono said a restart could only be considered once it has been ensured that an investor buys Mango.
“The airline will be inactive for a considerable period as the process of obtaining an investor will take some time,” he said.
“As a result, the revised plan will inevitably have to accommodate a greater number of employees potentially affected by the restructuring than in the case of the current plan, which was published on October 29, 2021.”
At the creditors’ meeting it was agreed that the affected parties will meet again in fifteen days after contemplating the possibility of getting rid of a restart as part of Mango’s business rescue process.
It appears that public funds will only be used to pay off debts, not to boost a going concern.
“This is ultimately a fatal blow for Mango,” said Wayne Duvenage of the Undoing Tax Abuse Organization.
“Having moved on from the motivations to parliament that more than 800 million rand of SAA’s bailout funds were allocated to Mango, because it was an integral part of SAA’s future plans, now, just a few months later, it will be motivating. to get rid of Mango and not use those funds to support its survival smells of sheer confusion, incompetence and mismanagement. ”
Meanwhile, taxpayers await an update on the SAA / Takatso deal announced in June.
Alf Lees of the Democratic Alliance said Mango’s likely disappearance could play a role in the deal in which the founder of budget airline Lift, Gidon Novick, spearheads the consortium charge to acquire a majority stake in SAA.
“It seems clear that Takatso does not want to take over any liabilities that would go along with donating SAA taxpayers to them.
“Also, the Takatso consortium already has a low-cost carrier in its barn and clearly does not need another in the form of Mango. Hence, the need to get rid of Mango and its multi-million dollar liabilities before the SAA donation to Takatso can be made. ”
Duvenage said there does not appear to be clarity on the plans for Mango.
“If there was ever a time to launch an airline in South Africa, it would be at the beginning of the summer season. That horse has now shot towards Mango.
“Unfortunately, it is the creditors and the staff who suffer the brunt of such poor leadership decisions.”
This article was published for the first time here and republished with permission.