Mango Airlines, a low-cost subsidiary of South African Airways (SSA), is set to be placed under business rescue in order to protect itself from bankruptcy, says interim CEO of SAA, Thomas Kgokolo.
“The board and shareholders have agreed Mango will go into business rescue,” Kgokolo said in an interview with eNCA.
“We are in consultation with our key stakeholders on how we can manage that particular process.”
Mango’s parent SAA only itself exited business rescue in April and has been on some form of bankruptcy protection since December 2019. SAA’s luck only turned worse as the COVID-19 pandemic struck, effectively eliminating air travel for a significant portion of 2020.
Before then SAA, at the time a fully state-owned enterprise, had been depending on government bailouts to stay afloat, further constricting the national budget.
Last month, the government announced that it would sell a majority stake in SAA, 51%, to the private Takatso Consortium in order to turn the ailing airline around.
Takatso Consortium is a 51% black-owned enterprise that comprises pan-African investor group Harith Global Partners and aviation group Global Aviation. The consortium is expected to pump R3-billion into the airline initially.
SAA has retained its name and will continue to be a South African-based enterprise. The government also negotiated what’s known as a “golden share” of 33% of the airline, meaning that the government will always have a say in the airline as it moves forward as mostly private.
“We believe the whole sector, from our point of view, is growing. We look forward to the venture and believe it will be very good,” Harith co-founder and Consortium Chair Tshepo Mahloele said about the deal.