Mango's application for voluntary business rescue postponed - lessor needs more time

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The unions also want to avoid what they claim will be the business rescue process being "guided" by government.
The unions also want to avoid what they claim will be the business rescue process being "guided" by government.
  • A lessor who has filed for Mango to be liquidated is challenging whether the low-cost airline can legally still opt for voluntary business rescue.
  • Since the lessor says he was not formally notified of Mango's intention to apply for voluntary business rescue on Tuesday, the case was postponed.
  • If Mango is not allowed to go into voluntary business rescue, the application by three unions to have the airline placed in business rescue will be heard.

Mango's application to go into voluntary business rescue has been postponed and will now be heard as an urgent matter in the South Gauteng High Court in Johannesburg on Friday.

The case was postponed on Tuesday at the request of one of the airline's lessors, which has filed a case to have Mango liquidated in April this year.

The lessor is contesting whether Mango is still legally allowed to opt for voluntary business rescue if there is already a liquidation application filed against it. Earlier this year the lessor agreed to have the liquidation application postponed.

If Mango is found not be able to still go into business rescue voluntarily, then the court will hear an application by three unions to have the airline placed in business rescue.

On Tuesday it was argued on behalf of the lessor that they were not formally given notice by Mango of its intention to bring the application for voluntary business rescue. The lessor found out about it "during informal discussions over the weekend".

Mango, a subsidiary of South African Airways, wants the court to rule that the airline already went into voluntary business rescue on 28 July this year. In order for this to happen, Mango wants the court to rule that the Companies and Intellectual Property Commission (CIPC) had wrongfully dismissed a notice indicating that its board had made a resolution in April this year to have the airline placed in voluntary business rescue.

The Mango Pilots' Association (MPA), the South African Cabin Crew Association (SACCA), and the National Union of Metalworkers of SA (Numsa), however, challenge Mango's claim that it adopted and filed its own resolution to go into business rescue in time.

The unions claim that the the airline, its parent company SAA, and the Department of Public Enterprises (DPE) as shareholder representative, merely promised to collaborate on having the airline placed in business rescue, but failed to deliver.

The unions also want to avoid what they claim will be the business rescue process being "guided" by government, should voluntary business rescue be allowed.

Mango, which employs more than 700 people, still has not received R819 million from a R2.7 billion special allocation for SAA's subsidiaries from R10.5 billion allocated to SAA in the mini-budget last year. The funding for Mango has been approved by Parliament and the Act relating to it came into effect some weeks ago.

On average, Mango employees who have continued working are owed about six months' worth of salaries. Mango employees' salaries for June are still outstanding, and the preceding months saw them receiving partial salary payments. With the exception of September and December last year and February to May this year, when they got full salary payments, Mango employees have been receiving partial salary payments since April 2020.

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