Molefe Seeletsa
Digital Journalist
2 minute read
18 Aug 2021
2:50 pm

DPE hopes to conclude Mango business rescue process in three months

Molefe Seeletsa

Government has since provided funding for Mango's restructuring process.

An unidentified man takes a photograph of the new G-connect activated aircraft at Lanseria Airport on 8 May 2012 in Johannesburg. Picture: Gallo Images/Foto24/Theana Breugem

The Department of Public Enterprises (DPE) says it hopes to conclude the business rescue process of embattled low-cost airline Mango within three months.

Business rescue

Mango, a subsidiary of South African Airways (SAA), was voluntarily placed under business rescue last week, which effectively immediately protected the airline against claims from creditors.

The move came after the National Union of Metal Workers of South Africa (Numsa), alongside Mango Pilots Association and the South African Cabin Crew Association (Sacca), approached the High Court in Johannesburg.

ALSO READ: Mango in crisis because of DPE ignoring ‘rampant looting’, says Numsa

In late July this year, it was announced that Mango would be placed under business rescue, following financial difficulties.

The financial crisis saw Mango not paying its 749 staff members two months’ salary.

The severely distressed airline also confirmed the suspension of its flights, with immediate effect, due to non-payment to Air Traffic Navigation Services (ATNS).

Funds made available

Briefing the portfolio committee on public enterprises on Wednesday morning, DPE director-general Kgathatso Tlhakudi revealed that government had provided funding for Mango’s restructuring process.

“As we know the unions had opted to go to court to force the business rescue process. We are in the midst not only agreeing on a plan for the business rescue, but also ensuring there is funding to support the potential that there is a post commencement funding for the business,” the director-general said.

Tlhakudi said the SAA board had appointed Sipho Sono of OPIS Advisory as the business rescue practitioner (BRP).

READ MORE: SAA holds Mango staff to ransom

The director-general added that the department intended on concluding the business rescue process “speedily” within three months, saying the process would advise on the long-term future of Mango.

“It is our hope that the business would not be lost from our skies, but what we are dealing with is a major challenge,” he said.

However, a letter sent by former SAA interim board chair Geoff Qhena to Public Enterprises Minister Pravin Gordhan confirmed that the department favoured winding down Mango.

This is according to Mango chief executive William Ndlovu’s affidavit.

Mango meets with creditors

Mango annonuced that the BRP was scheduled to meet with creditors and employee representatives on Wednesday as the airline’s business rescue process continues.

“These meetings mark the start of formal engagement with affected parties, and it is anticipated that committees additional to the minimum requirements of the Companies Act may be created, to ensure that bottlenecks are identified and eliminated proactively,” the airline said in a statement.

The airline also urged customers to contact them about unflown tickets, vouchers and other related matters.

Additional reporting by Cheryl Kahla and Hein Kaiser