JOHANNESBURG – Low-cost airline, Mango, has confirmed that it will be going into business rescue.
The development was confirmed by the airlines’ spokesperson Benediction Zubane on Monday morning.
“I can confirm that the interim CEO (Thomas Kgokolo) did go onto television this morning and made a pronouncement that Mango will be put under business rescue. As soon as we have the official statement we will be releasing it to the media.”
The national carrier announced an agreement to sell a majority stake to a local jet-leasing company and private equity firm in June.
A consortium comprised of Johannesburg-based Global Airways – which owns recently-launched domestic airline Lift – and private equity firm Harith General Partners will take a 51% shareholding in the national airline.
The consortium, named Takatso, will invest as much as R3.5 billion over the next three years.
Lift co-founder Gidon Novick and Harith chief executive officer Tshepo Mahloele said that the government will have no further financial obligations to the company, outside of the existing liabilities that they will settle.
“Route networks we are still working on, and it will be a phased rollout based on demand re-emerging post-Covid.”
In 2019, Mango’s parent parastatal, South African Airways (SAA), went the same route and was given R10.5 billion by the government to cover its business rescue process.
As a subsidiary, Mango was expected to get R819 million to help with restructuring, paying off debt, and providing working capital to fly again.
Earlier this year, Parliament was told that the success of SAA’s business rescue plan depended on the financial and operational health of its subsidiaries like Mango.
Mango Airline’s communication team has chosen not to elaborate on the situation and is instead redirecting all questions to the Department of Public Enterprises and SAA.