Mango Airlines is now slated to undergo a structured wind-down following four years of turbulent business rescue and a failed acquisition.
This represents the latest step in the ongoing business rescue plan, where the state-owned airline’s business rescue practitioner (BRP) proposed an amended solution that would avoid immediate liquidation and instead allow for a structured wind-down.
The amended plan will be released in the next two weeks and will be followed by a meeting with Mango’s creditors, who will then vote on the plan.
This amended plan aims to ensure that creditors receive their dues, as a liquidation would result in the South African Revenue Service (SARS) taking preference over creditors.
Creditors in this case would only receive 2.68 cents for every rand they are owed, while a structured wind-down could boost this to up to 12.18 cents.
This was further confirmed in a statement released by Mango’s BRP on 4 August this year, which noted that business rescue was still a better option than immediate liquidation.
The amended plan and focus on securing a structured wind-down result from several setbacks to the plan that have seen Mango’s hopes to reopen dashed.
The initially proposed business rescue plan heavily relied on securing an investor, which it did with AfricaStay in 2022, with the investor representing Ubuntu Air.
However, the deal required government approval, including the Minister of Public Enterprises.
The approval from the Minister was delayed following SAA raising concerns over the deal, and even after the High Court instructed him to make the decision, it remained unmade.
By 2023, the International Air Services Council cancelled Mango’s international air service licences with immediate effect due to this lack of progress in the business rescue plan.
This was followed by the cancellation of the airline’s domestic air service license in 2024.
Adapting to these changes, Mango’s BRP and AfricaStay revised the proposed plan and released a new model for the airline.
This would involve Ubuntu Air acquiring Mango and operating the company through a joint venture with a licensed airline.
However, this new plan was also put on ice after the High Court declared a part of it was invalid in June, preventing its implementation.
These delays have resulted in the need for the new amended plan and focus on implementing a structured wind-down while avoiding immediate liquidation.
Mango Airlines
Mango Airlines was launched in 2006 as a subsidiary of SAA and, for many years, was one of South Africa’s most popular, affordable airlines.
However, the airline began to experience financial difficulties, which culminated in the airline being grounded and entering voluntary business rescue in 2021.
These financial challenges chiefly involved mounting debts and the withdrawal of government stakeholder financial support.
The business rescue plan was originally intended to get the airline back into operation, but these latest updates make this a remote possibility.
This is unfortunate as Mango’s return to the flight industry in South Africa would help reduce ticket prices and the strain the sector is enduring.
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