The sale of South Africa’s Mango airlines may be in trouble again with the Minister of Public Enterprise, Pravin Gordhan, withholding his consent within the timeframe of 30-days as he was not satisfied with some of the queries raised by the South African Airways, the parent company.
Mango Airlines had appointed Sipho Sono, a senior business rescue practitioner (BRP), as the provisional liquidator in order to find investors post ceasing of its operations, eighteen months back.
South African Airways initially submitted an application to sell Mango on September 30, 2022. The BRP handed in another application on November 28 to the Department of Public Enterprises, who had 30 days to make a decision. However, the Minister is still yet to give his verdict.
"The BRP regrets to inform affected parties that despite the positive update provided in the previous report, the Minister is yet to make a decision on the Application," the airline said in a statement.
With the minister’s delay in decision making the future of the airline is in jeopardy. With its license suspended and a mounting pile of debts and liabilities, if the airline cannot secure a new investor soon, chances are the airline might have to be liquidated with its assets sold to creditors.
South African Airways was supposed to receive a letter from the National treasury stating that the airline would have to submit its sale application directly to them. As per the Public Finance Management Act, the application can be deemed as approved if not responded to in 30 days by the responsible authorities, although South African Airways and DPE have agreed to extend this deadline by another month.
Sono believes that there is reasonable cause to rescue the company and that the business rescue process would be better for creditors and other parties than what would result if the company was to be placed in liquidation.