MANGO Airlines’ Business Rescue Practitioner, Sipho Sono, in his latest monthly progress report, has accused the Department of Public Enterprises (DPE) of jeopardising the investor process by its failure to pay over R399m in promised funding.
Sono argued that the delay was endangering a deal that was at an advanced stage. He said after his earlier requests had been ignored by the Minister, he eventually had to resort to threats of legal action to compel the Minister of Public Enterprises to release the R399m in funding that had been “allocated for the rescue of Mango”. (This had been a part of a special appropriation from SAA’s business rescue funding, passed in July 2021 - Ed).
In his progress report, dated March 31, Sono goes on to say that the funds were ultimately paid over into SAA’s account, confirmed on March 31. He expressed his insistence that Mango should be given access to the funds as a matter of urgency.
The report also revealed that employee representatives were due to meet on April 4 for the purpose of concluding a retrenchment plan with employees who had accepted “an improved retrenchment proposal”. Termination notices were set to follow on April 5.
Investor process – a timeline
Sono said interested parties had requested an extension for the submission of binding offers and had been given one until April 7.
The timeline from then onward:
- An evaluation process of binding offers will take place until April 20;
- Thereafter, the selection of the preferred bidder will take place (ending April 21).
- Negotiations and the execution of a transaction agreement could then happen between April 22 and May 6.
- By the end of May, the partners would need to have necessary approvals in place and a framework that the airline’s executive has agreed to.
- Then, it should take no more than 60 days for approvals, including Competition Commission approval (according to the summary, the timeframe will depend on whether the preferred bidder is an existing competitor);
- Thereafter, an effective ‘date of the transaction’ can be expected.
It therefore seems unlikely that a deal could be concluded any earlier than the end of July.
Sono warned that, in the event that there were no suitable offers received, the BRP would have to implement the wind-down plan (incorporated in the BR Plan). But he concluded that there was still a “reasonable prospect” of rescuing the airline, and that the BR Process would result in a better outcome for Mango’s creditors and shareholder, SAA, than would otherwise be achieved if Mango was liquidated.
