U-turn in Mango’s rescue plan

Mango will not fly again soon.

A statement by shareholder South African Airways (SAA) this week said that it doubts the viability of restarting its budget-baby.

Board chair John Lamola reiterated the content of a recent statement where he instructed business rescue practitioner Sipho Sono to amend the business rescue plan and remove any notion of a restart.

Public enterprises’ R819 billion bailout funding seems to be a settlement and shut down fund instead.

But SAA said something different in a statement dated 26 October, sent from interim chief executive Thomas Kgokolo and interim chief financial officer Fikile Mhlonto.

SAA asked department of public enterprises director-general Kgathatso Tlhakudi to pay more of the R819 million in bailouts allocated to Mango. It noted that only R100 million had been received.

That SAA statement said the money would be used for investment into a business rescue plan for Mango.

ALSO READ: SAA board signs Mango’s death sentence – 709 jobs likely lost

However, four days later, SAA wrote to the business rescue practitioner instructing him not to apply any funding to working capital and not to restart the airline. SAA’s Kgokolo declined to say what had changed in four days to justify such a dramatic U-turn.

The Mango business rescue plan lays out three options:

• To resume operations and cover its overheads through operations;A
• Acquire an equity partner; or
• Wind down the business.

By not allowing Mango to trade, shareholders SAA and public enterprises are effectively culling 709 jobs and banking R173 million in unflown tickets, which an operating Mango could have honoured.

It is unlikely that a suitor would be found before the bailout cash runs out. Mango is more than R2.5 billion in debt.

The Mango Pilots’ Association, the South African Cabin Crew Association and Numsa have been at the coalface to save the company. First, they forced Mango into business rescue with a high court action in July.

Now, they are fulfilling an oversight role of the business rescue process.

– news@citizen.co.za