Mango bidder delivers proof of fundingOne of the bidders for low-cost airline Mango has made significant progress, providing adequate proof of funding, according to the latest report by business rescue practitioner Sipho Sono.
The bidder is not named, but the report states that it is a consortium.
In a prior report, Sono had said offers indicated that the bidders would be funded by their offshore partners. A share subscription agreement was concluded with the preferred bidder on 28 July.
The agreement provides, among other things, for the bidder consortium to subscribe for shares in Mango equivalent to an agreed purchase price. The price was not revealed, but Mango's rescue plan stipulates that any buyer must show they have access to at least R200 million to enable Mango to resume operations.
One of the conditions of the subscription agreement is that the bidder consortium must provide a bank guarantee in favour of Mango for the full purchase consideration, on or before 10 August.
After that, Sono will compile an application - in line with the Public Finance Management Act - for Mango's parent company, South African Airways, to submit to its shareholder the Department of Public Enterprises (DPE) for urgent consideration.
Mango went into voluntary business rescue at the end of July last year and has not flown since. It owes R2.85 billion to creditors, and also has about R183 million of unflown ticket liabilities. The only asset of value Mango has is a spare engine, and offers to buy it have been received.
Mango does not form part of the deal that will see the Takatso Consortium will obtain a 51% stake in SAA. Global Aviation, a minority shareholder of Takatso, operates its own airline, LIFT.
Mango can, therefore, not resume operations unless it secures an investor to buy and relaunch the airline. If such a sale fails and the rescue practitioner is not able to conclude a deal with a reserve bidder, the airline will be wound down. Then creditors will likely receive only 10c in the rand, Sono estimates.
All Mango's employees have been retrenched apart from a few retained on short-term contracts for critical care and maintenance activities required while the process to secure an investor continues.-Fin24