Mango Airlines has postponed a key meeting with its creditors and voting interest holders, delaying the final decision on whether to approve its wind-down business rescue plan or proceed to liquidation.
In a notice published on September 10, the Business Rescue Practitioner, Sipho Sono, confirmed that the meeting had been rescheduled to November 7. He said additional time was needed to address queries and consider proposed amendments submitted by creditors and SAA, Mango’s majority shareholder.
Sean Mendis, an aviation consultant, said some of the questions could relate to SAA's bailout funding and how much of it had been allocated to Mango. According to a Mango notice issued in 2022, SAA received funding of R399 million in December 2021 for Mango’s revival, but reportedly Mango received only R225 million.
“This money was never fully reconciled. When the government allocated funds to Mango in 2021, a lot of those funds went to SAA because SAA was resuming operations and Mango was not,” said Mendis. “This reconciliation is something that would need to be sorted out before any winding down takes place.”
The amended business rescue plan would be published by October 31, said Sono.
A new investor?
Meanwhile, industry speculation has surfaced that Mango may have attracted interest from an international airline investor, as reported by ch-aviation.
Travel News was unable to independently verify this claim
Mango’s previous investor, Ubuntu Air Services, pulled out of its investment agreement with the airline on July 31, citing delays and regulatory hurdles, as reported by Travel News.
Mendis, however, cast doubt on the possibility of any serious new investor. “Mango does not exist for all practical purposes. All Mango has is a name. I question whether this is actually a serious investor because there is zero value in buying an airline which has no assets.”
SAA subsidiaries’ debt mounts
Both Mango and South African Express Airways (SAX) were recently named in a list of SOEs that were liquidated or under business rescue, but still owed the Auditor General of South Africa (AGSA) for auditing services.
According to AGSA, Mango owes R2 million and SAX owes R21 million for auditing services, despite SAX’s wind-down which was initiated in 2022. Treasury warned AGSA that it would likely have to write off these debts.
“The reality is that these companies had huge amounts of debt spread all over the place. There's no surprise that some of these go into SOEs. When a company fails, the creditors usually get stuck with losses,” added Mendis.
