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Fin24 reports that a total of 553 of Mango's 708 employees, or 78%, have applied for voluntary severance packages (VSPs) offered as part of the low-cost airline's business rescue process.
This amounts to 86% of Mango's monthly salary bill of about R27 million. In addition, the contracts of employees who were hired on a fixed term have been terminated, according to the latest status report published by the rescue practitioner Sipho Sono. Mango's creditors will get to vote on an amended business rescue proposal on 2 December. Mango went into voluntary business rescue at the end of July this year and has not flown since. It owes R2.85 billion to creditors, and also has about R183 million of unflown ticket liabilities. Mango's shareholder, SA Airways (SAA), has stipulated that funding it provides should not be used for Mango to resume operations. Because Mango is currently not in a position to resume operations without such funding, Sono says he has had to offer VSPs to all employees except a few critical positions required to keep the airline "on care and maintenance". Earlier this year Mango was given R819 million from a special allocation approved by Parliament from R10.5 billion given by Treasury for SAA's own business rescue process. Mango has since received R100 million of the R819 million which it used for payment of salaries for July 2021 to September 2021 and 50% of salaries for October 2021. According to the latest report, a further amount of R320 million was received on 26 November to fund the VSPs "and other restructuring costs". The balance of R399 million is expected to be paid soon after the adoption of the amended proposed rescue plan. Sono remains of the opinion that there is a reasonable prospect of Mango being rescued. But, if an investor is not secured swiftly and Mango is not able to continue trading for whatever reason, Sono would have to start with a structured winding down of the company.
- Read the full original of the report in the above regard by Carin Smith at Fin24
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