Business Rescue Practitioner (BRP) Sipho Sono, who is responsible for implementing the business rescue plan for state-run low-cost airline Mango, has expressed his concerns over the sale of Mango due to Public Enterprises Minister Pravin Gordhan's retirement from politics announced last week. I hope that the resistance will disappear. Mango also disappears.
Mango is a subsidiary of South African Airways (SAA) and is involved in a controversial sale deal for a 51% stake with the Takatso consortium.
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Mr Sono says Mr Gordhan's fight against the sale has no logic as both SAA and Takatso have shown they are not interested in running a low-cost airline.
“The new minister may have a different view and look at things objectively,” he says.
I'm not completely indifferent…
Mr. Gordhan has been unable to make decisions regarding the sale for an extended period of time, and his approval as shareholder representative is a legal requirement for the sale to proceed, paralyzing the business rescue process and job recovery efforts. .
Mr. Sono said Mr. Gordhan had not given any substantive reasons for opposing the sale.
If Mr. Gordhan had refused the request, his decision could have been reconsidered, but by simply not making any decision, he deprived corporate rescue practitioners of their legal strategy. It will be.
Mr Sono eventually went to court, and in September last year, the Gauteng Division of the High Court ruled that Mr Gordhan's failure to make a decision was unlawful and that unless he made a decision within 30 days, Mr Sono would not be allowed to do business. The court ruled that it had the right to proceed.
But the problem didn't end there.
Legal action, buyers will have to wait
After permission to appeal was refused, Mr Gordhan filed an application for delay in asking the Supreme Court of Appeal (SCA) to hear the matter, which on February 14 ordered a stay on the sale of Mr Sono until February 14. We filed an emergency petition with the High Court asking for the same. The procedure at SCA has been completed.
The parties have now agreed that the emergency application to stop the sale will be heard in the week of April 2nd, and if the SCA rules on whether to grant Mr Gordhan's late application, that decision will also be made. It will be submitted to the High Court. .
Meanwhile, Mr. Sono has given a commitment to a specific buyer, Ubuntu Air Services, not to enter into a final contract for the sale of the mangoes until April 5th.
According to reports, Ubuntu Air Services is a partnership between South African travel company Africastay and DG Capital, which specializes in vacations in the Indian Ocean.
mango
Mango has not flown since entering Business Rescue in mid-2021.
Still, Sono says the airline has significant value.
This is due to the following points.
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- mango brand.
- A customer base that is likely to return when you take to the skies again.
- A significant number of passengers may return to redeem vouchers for flights booked when the airline was still operating, laying the foundation for a future customer base.
- Domestic airline licenses allow new entrants to the domestic aviation market to skip the new applicant queue, facilitating market entry.and
- Mango's proven IT and other systems.
The sale is the centerpiece of a business rescue plan adopted by creditors in December 2021. If the plan fails, the alternative would be to downsize the business.
Transaction almost completed
Sono doesn't think the promise to not sign a deal with Ubuntu by April 5 will further block a deal.
He said the draft agreement was 90% complete, with SAA reviewing it and providing comments, with only a few “tweaks” remaining.
“We're working on it,” he said, hoping to finalize the deal by early April.
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He says the business rescue plan could have been implemented long ago if not for Gordhan's resistance.
“The mangoes would have flown and ended up in private hands.”
It would also mean the restoration of staff positions.
employee
Mango employees who were sent home during the business rescue process will be among the first to get jobs when the business is revived.
This prompted the National Union of Metalworkers (Numsa) to support Sono in court in his fight to sell the airline.
Numsa spokesperson Phakamile Hlubi-Majola said Moneyweb's resistance to Gordhan's sale was “outrageous” and asked why.
“The purpose of the sale is to ensure that mangoes are no longer a burden to the state,” she said.
“Business rescue experts have found a buyer, but the minister is blocking the process.”
