In a significant setback for the embattled state-owned low-cost airline Mango, the Gauteng High Court in Johannesburg has declared that its business rescue plan cannot be implemented, leaving the airlines hopes of resuming operations hanging by a thread.
Four years after it was grounded in July 2021, the road to recovery now seems fraught with further obstacles.
The ruling came after Aviation Co-ordination Services ACS, a creditor owed approximately R2.91 billion by Mango, challenged the viability of the airlines rescue plan, spearheaded by business rescue practitioner Sipho Sono.
ACS, which provides indispensable security-related services such as baggage and cargo screening, argued that the plan unfairly allocated minimal compensation to creditors while failing to address the airlines dire financial situation.
When placed under business rescue in July 2021, Mango found itself in a precarious position, lacking material assets with most of its operations reliant on leased equipment. The business rescue plan proposed a top-up settlement payment to concurrent creditors, promising them 4.43 cents for every rand owed, a figure ACS described as negligible, if not nominal.