Mango sale hinges on Gordhan’s approval

The consortium selected to buy low-cost airline Mango continues to keep its offer open pending the conclusion of litigation against minister of public enterprises Pravin Gordhan.

This is according to the latest business rescue report for the airline. It is the twentieth such report since the airline went into business rescue in July 2021 and stopped flying. The report makes it clear the risk remains that the chosen investor may pull out should the stalemate with Gordhan not be resolved “timeously”.

The consortium, which has not yet been named, has been waiting since November 2022 for approval of the deal by Gordhan in terms of the Public Finance Management Act (PFMA). Mango’s business rescue practitioner, Sipho Sono, turned to the court in February this year to try to force Gordhan to decide on the sale.

Sono claims Gordhan wanted to see the business case of the chosen investor before making a decision. Sono is concerned about sharing such information, as Mango is likely to compete with its parent company, state-owned SAA. Gordhan opposed the application and the court still has to give judgment in the matter.

If the transaction fails, Mango will have to be wound down in terms of its business rescue plan. The latest Mango report reveals the airline sold an aircraft engine to a USA-based aviation company, GA Telesis, in May. It was the only tangible asset Mango had. Its intangible assets are its brand, systems and potential speed of entry into the market for a new owner.

This is because, while its domestic operating licenses are suspended, it could be lifted once a viable business plan has been presented to the relevant licensing council. Sono was hoping that Mango could restart operations already in December 2021 to benefit from the peak summer holiday season at the time.

However, Gordhan stipulated an investor had to be found to get Mango off the ground again. He would, therefore, not allow the R819m allocated to Mango from government funding for SAA’s own business rescue to be used to get the airline flying again.

SAA is still waiting for approval by the Competition Tribunal of a strategic equity partnership with the Takatso Consortium.