Johannesburg – The future of embattled airline Mango is up in the air after one of its suppliers on Wednesday launched a court bid to have the company liquidated.
Irish company Aergen Aircraft Four Limited has asked the Joburg High Court to wind up the airline for debts amounting to $3.9-million (R56-million).
Mango, which is owned by the equally embattled SAA, in 2014 entered into two aircraft lease agreements with Aergen for two Boeing B737-800. However, Mango has since defaulted on payments due to its well-publicised financial woes. Aergen appointed Carlyle to represent it as lease servicer. Carlyle CEO Andrea Yelverton deposed the affidavit seeking the liquidation of Mango.
In it, she details the back-and-forth discussions between Aergen and the state-owned entity, which is pleading poverty.
“As of October 2020, no payments have been forthcoming from the company [Mango]. On 28 October 2020, I sent a WhatsApp to William Ndlovu [CEO of Mango] asking if any payments would be made before December, and I received the following message: “I am afraid not. We will wait for the money and make sure that we settle.”
On Wednesday, all Mango’s flights across the country were grounded for most of the day after the country’s airports operator Acsa blocked its flights over outstanding payments.
Acsa later the same day cleared Mango to operate again, following a deal brokered with airline management and the Public Enterprises Ministry to provide part payment.
Ndlovu, in an internal memo seen by Sunday World, dated April 22, told staff that the government as a shareholder has been asked to place the entity into business rescue until at least July, when the company expects the bailout from government to start flowing through.
The contents on the memo bear testimony to Yelverton’s assertion that funding from the government may not be forthcoming.
“We engaged with all the creditors and requested that we be given up until January 2021 to settle what is due to them, and this was granted. However, due to reasons unknown to us, we did not receive the funds in January 2021,” her affidavit reads.
“We engaged the relevant stakeholders and were told to wait, maybe in February 2021, the money will come, and we are now in April, with no sign of the money. At the beginning of April 2021, we were then informed that Mango will only receive funds in June 2021.”
Mango is unlikely to be able to pay the salaries of its 500 or so employees from this month as it battles to stay afloat.
The Department of Public Enterprises on Friday said SAA was handed back to its board after business rescue practitioners announced the business rescue process closed,17 months after it was launched.
Taxpayers have so far spent R7.8-billion to keep SAA afloat. The department did not specifically address the Mango matter but hinted big changes are on the cards.
“The interim board of SAA is mandated to oversee the strategic, financial and operational management of subsidiaries of SAA, South African Airways Technical, Airchefs and Mango, and ensure their commercial sustainability. These subsidiaries will need to be restructured and, in some instances, the case for continued existence must be assessed.”
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