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According to an internal memo to staff on 22 April 2021 by Mango’s Acting Chief Executive Officer, William Ndlovu—Mango Airlines is set to be grounded as of 1 May 2021. This, until the airline, acquires the necessary financing from the South African government.
In the leaked memo, seen by FIN24, Ndlovu divulged the State had been asked to support decisions by Mango’s Board and the interim Board of parent firm South African Airways to put the financially constrained carrier into business rescue.
A spokesperson for the Department of Public Enterprises (DPE), Richard Mantu, said the Department is currently in discussions with both the Board of Mango and (Interim Board of) SAA regarding the repositioning of the subsidiaries due to delayed funding.
The DPE has been attempting to secure R2.7 billion of the R10.5billion allocated in the mini-budget in October 2020 to go to SAA’s various subsidiaries, including SAA Technical AirChefs and Mango. For this to happen, Treasury requires Parliament to make a special allocation for the cash flow to be released. According to reports, Ndlovu’s memo further elaborates that Mango’s predicament results from the promised state funding, which will now only be expected to be available in June 2021.
According to Ndlovu’s document, this put Mango Airlines in a problematic situation, as this means it would require further extensions from creditors who could not wait for payment any longer. In fact, he stressed that lessors then put an ultimatum to Mango, stating that should they not receive their money by 30 April 2021, all of their aircraft must be grounded until such time that Mango received the necessary funding and is able to pay.
Reports state that Ndlovu was told Mango would not receive money until June 2021, which means the airline will not operate from 1 May 2021 and be put into business rescue until July 2021. According to the document, this proposal was approved by both Boards, and the SAA board has forwarded this to DPE to support the Board’s approval as an ultimate shareholder.
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