Fin24 reports that it has become clear that low-cost airline Mango will be mothballed for a considerable period, as the process of securing an investor will take some time.
This was indicated by the low-cost airline's business rescue practitioner Sipho Sono on Monday, following a meeting of creditors who were supposed to have voted on his proposed rescue plan. The meeting was adjourned because Mango’s shareholder, state-owned South African Airways (SAA), wanted an amendment relating to what funding could be used for. According to Sono, an amended plan will inevitably have to consider a greater number of employees being potentially affected by the restructuring than was the case in the current proposed plan that was published on 29 October 2021. The process of offering voluntary severance packages to Mango's approximately 700 employees is currently under way and Sono has indicated that he hopes to have it finalised by the end of November. Mango, a subsidiary of SAA, stopped flying at the end of July this year when it went into business rescue. It is about R2.5 billion in debt and risks losing its route rights if its return to the skies is delayed. In the current proposed rescue plan, Sono was keen for Mango to restart operations in December to benefit from the peak summer traffic. He wanted to use some of the R719 million still due to Mango in terms of a special allocation made by Parliament from the R10.5 billion allocated for SAA's own rescue plan. However, SAA's board made it clear that it is only willing to supply funding for Mango's restructure and not to restart operations. SAA wants an investor to finance any restart. The proposed plan will now be amended to read as such and a meeting of creditors will be called in due course to vote on it.
- Read the full original of the report in the above regard by Carin Smith at Fin24
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