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IOL News
4 days ago
- Business
- IOL News
Mango Airlines faces legal challenges in its business rescue plan
State-owned Mango appears no closer to the skies again, four years after the low-cost airline was grounded in July 2021, as legal challenges intensify. Image: File Troubled state-owned low-cost airline Mango's business rescue practitioner (BRP), Sipho Sono, has instructed his legal representatives to appeal against the Gauteng High Court, Johannesburg, judgment stopping the implementation of its business rescue plan. The move follows Judge Denise Fisher finding that 'the plan, shorn of its complexity, amounts to nothing more than the confiscation of the creditors' claims in order that they be transferred by Sono to an investor who pays no value for them or the shares'. The matter was brought by Aviation Co-ordination Services (ACS), which provided security-related services such as baggage and cargo screening services, baggage reconciliation, and check-in services. The company hauled Mango and Sono to court over the plan to save the South African Airways subsidiary. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ ACS is among dozens of creditors owed about R2.91 billion by Mango before it was placed under business rescue in July 2021. Mango owes ACS over R23.3 million and was among the creditors who voted against Sono's business rescue plan approved by 98% of the voting creditors. ACS objected to a payment to the creditors (clause 6.2.6) in the plan, stating that all of the remaining balance of the claims of the remaining concurrent creditors will be ceded to the investor at face value thereof, but for nominal consideration. In his latest communication all affected parties, Sono indicated that on June 17, the Gauteng High Court, Johannesburg, handed down a judgment in the application launched by ACS in terms of which it declared the compulsory cession contained in clause 6.2.6 of the business rescue plan was declared invalid and of no force and effect. The court also declared that the business rescue plan cannot be implemented. 'Since the handing down of the judgment, the BRP has carefully studied the judgment and consulted with his legal representatives,' Sono explained. The BRP said following the engagements with his lawyers, he intends to apply for leave to appeal against the whole judgment. He has accordingly instructed his legal representatives to prepare the necessary documents for purposes of noting the appeal and undertook to provide further updates on the status of the appeal in due course.
IOL News
19-06-2025
- Business
- IOL News
Court halts Mango airline's business rescue plan
State-owned Mango's step towards resuming flights does not appear to be any closer, four years after the low-cost airline was grounded in July 2021. This follows a Gauteng High Court, Johannesburg ruling that its business rescue plan cannot be implemented. Image: File The process of reviving state-owned low-cost airline Mango appears to have been stopped after the Gauteng High Court, Johannesburg declared that its business rescue plan cannot be implemented. Aviation Co-ordination Services (ACS) hauled Mango and its business rescue practitioner Sipho Sono to court over the plan to save the subsidiary of South African Airways (SAA). ACS, which provided security-related services such as baggage and cargo screening services, baggage reconciliation and check-in services, is among dozens of creditors owed about R2.91 billion by Mango before it was placed under business rescue in July 2021. At the time it was placed under business rescue, Mango did not own any material assets as its most significant assets were leased. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading In September 2021, a couple of months after being placed under business rescue the only asset on Mango's balance sheet was a spare engine bought by SAA for US$9.6m with the lowest indicative offer received in the last 12 months being around US$2m (R30m then). Mango also had an un-flown ticket liability of about R183m at the start of the business rescue through its full value voucher system. ACS is owed over R23.3 million by the SAA subsidiary and was among the creditors who voted against Sono's business rescue plan, which was approved by 98% of the voting creditors. The company objected to a payment to the creditors (clause 6.2.6) in the plan stating that all of the remaining balance of the claims of the remaining concurrent creditors will be ceded to the investor at face value thereof but for nominal consideration. It also indicated that the concurrent creditors, except the SA Revenue Service and the creditors in respect of the un-flown ticket liability, will be paid a "top up" settlement payment for their claims. This meant that the majority of the creditors would be paid 4.43 cents to every rand. ACS complained that the estimated settlement would translate roughly to R44,300 per R1m, a return which is negligible, if not nominal. In addition to the debt acquired by the investor through the cession of the claims of concurrent creditors may be converted to equity (or quasi equity instrument), subordinated or otherwise be dealt with in such manner that Mango will be restored to solvency. On Tuesday, Judge Denise Fisher found that 'the plan, shorn of its complexity, amounts to nothing more than the confiscation of the creditors' claims in order that they be transferred by Sono to an investor who pays no value for them or the shares'. 'The compulsory cession contained in clause 6.2.6 of the business rescue plan is declared to be invalid and of no force and effect. It is declared that the business rescue plan cannot be implemented,' the judge ordered. Judge Fisher said Sono's opposition of ACS's application was unmeritorious. Earlier this month, Sono announced Mango's plans to resume operations and requested passengers with un-flown tickets to register on its website, promising full value refunds once it takes to the skies again after four years. Sono did not respond to requests for comment on Thursday.
