The Portfolio Committee on Public Enterprises was yesterday briefed by business rescue practitioners on the Mango Airlines rescue process.
The committee was concerned that the amended business rescue plan sold 100 percent of Mango to a new investor, meaning the company would no longer operate as a public entity.
The chairman of the committee, Mr Haya Mgaksa, asked the Department of Public Enterprises, as a shareholder in the company, whether it would sell the airline in its entirety. “Will Mango be sold to any viable bidder that is not interested in keeping it as a state-owned enterprise?” he asked.
On 28 July 2021, Mango was placed into a voluntary business rescue program and 819 million rand was allocated for restructuring under the Special Appropriations Act.
In a rescue plan presentation, committee members heard that the airline had so far failed to attract private sector buyers and investors, and if the situation continued, the airline would be forced to sell its assets to pay creditors. At the moment, the airline has not completed the investment process, and this may lead to the exhaustion of the remaining allocated funds.
The committee heard that Mango’s assets are significantly less than 2.8 billion rand and the airline’s assets are insufficient to cover outstanding debts. The airline leases its fleet of aircraft.
The Portfolio Committee learned from the South African Airlines Board that it has no dealings with business rescue practitioners. The board was therefore shocked to learn on 7 October 2021 that they intend to re-launch Mango in the face of adverse market conditions in South Africa and the domestic airline economy.
Distributed by APO Group on behalf of the Republic of South Africa: Parliament.
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