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By Hein Kaiser


Business rescue plan suggests that Mango likely to be dumped

The budget airline looks like it aims to offload the company, while customers who still hold tickets have two options for getting reimbursed.

State owned budget airline Mango’s proposed business rescue (BR) plan was published on Friday afternoon, and outlines a restructuring plan for the airline or, as an alternative, to liquidate the asset.

At first glance, however, it looks like the plan is to get rid of Mango, either way, and that the airline will will be sold off, with buyer’s hopefully available for this to commence shortly after the adoption of the plan.

In the plan it states that “in accordance with guidance obtained from the shareholder that Mango will not form part of the SAA group going forward, it is accordingly envisaged in this BR Plan that an investor that will acquire all of the shares in the Company will be required. The process to search for a suitable investor will commence shortly after the adoption of the BR Plan.”

The planned sale of the airline will comprise two proposed phases.

“The Investor Process will comprise of a two-phased process whereby each interested party will be requested to submit an indicative offer in the first phase of the Sales Process, followed by a binding offer in the second phase of the Sales Process,” says the plan.

Should a suitable investor not be found, and “and the Company is not able to continue trading for whatever reason the proceedings will be converted into a structured wind down.”

Other salient points in the plan include the resumption of operations by December this year, with a fleet of 3 aircraft to start. The plan alludes to Mango expanding on this fleet as aircraft become available from lessors to exercise some of the lucrative route rights that it holds.

Mango has sole South African scheduled operator rights to Zanzibar.

Mango intends to cull almost 300 jobs as it intends to grow to a fleet of 8 aircraft, ultimately shrinking a headcount of 709 to 412 during the restructure process.

Passengers are currently holding un-flown Mango tickets amount to R 183 million. The plan indicates that “as the customers of Mango are critical stakeholders in the success of the airline, this BR Plan proposes that customers with un-flown liability be awarded vouchers to enable them to fly for the value of their tickets.

“Accordingly, the options for the treatment of un-flown tickets will be as follows: Vouchers will be issued to customers to the value of the ticket purchased. The voucher can be used to book and fly on Mango and to fly to any destination where Mango operates.”

“The vouchers will be valid for 12 months from 2 April 2022 to 31 March 2023. The voucher is not transferable and is only redeemable in the customer’s name. Customers who have pre-existing vouchers that they have not been able to redeem and that expire ahead of 1 April 2022 will be issued new vouchers valid for the full 12-month period. The vouchers redemption is subject to any differences in rates, fares and taxes”

And if ticketholders do not want to fly, they become creditors of the company and will have to stand in line to get a measure of money refunded.

Mango’s pre-commencement concurrent creditors, unsecured debt that Mango has owed prior to the Business Rescue process, will receive a dividend estimated at approximately 5 cents on the Rand, and in accordance with a business rescue waterfall payment scheme, will be paid at the conclusion of the Investor process.” 

Mango’s debt was noted at around R 2,8 bn in the plan.

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