Mango creditors accept R85 million less

Mango creditors accept R85 million less
Mango does not form part of the deal by which the Takatso Consortium will obtain a 51% stake in SAA.

Creditors of Mango have accepted R85 million less from government than the R819 million approved by Parliament in a special allocation 18 months ago, in a bid to avoid a long and possibly costly legal battle.

Mango has received a total of R734 million of the special allocation to date.

The R819 million for Mango was allocated from R10.5 billion approved by former finance minister Tito Mboweni in his 2020 medium-term budget for the implementation of the business rescue plan of Mango’s parent company SAA. Mango itself was not in business rescue at the time. 

SAA’s rescue plan did not provide for funding of SAA’s subsidiaries, including Mango. Therefore, the Department of Public Enterprises (DPE) asked Parliament for a special allocation of R2.7 billion to subsidiaries – including the R819 million for Mango.

Minister of Public Enterprises Pravin Gordhan told Parliament at the time that funding was also needed for SAA’s subsidiaries Mango, SAA Technical and Air Chefs because of the important role they played within the SAA group. That was why the DPE had asked Treasury for R14 billion in total.

A gap in funding was, therefore, created when Treasury allocated R10.5 billion for SAA’s business rescue plan only.

Mango went into voluntary business rescue at the end of July last year and has not flown since. It owes R2.85 billion to creditors, and also has about R183 million of unflown ticket liabilities. The airline cannot resume operations unless it secures an investor to buy and relaunch the airline.