Some potential investors are enthusiastic about mango, says rescue practitioners

The original rescue plan proposed for Mango wanted to resume operations with some of the funding from the SAA.

  • This week, potential investors in low-cost carriers Mango will be informed whether their “statement of interest” is eligible for the next round of the selection process.
  • Business rescue expert Sipho Sono says he has heard from several stakeholders.
  • Meanwhile, nearly 600 employees accepted the voluntary retirement package, reducing the number of staff to 105.

Sipho Sono, a business rescue practitioner for low-cost carrier Mango, says it has received several statements of interest from potential investors.

The names of potential investors have not been revealed.

According to process-related documents, the choice of the final investor is left to the sole discretion of the business rescue practitioner.

Mango embarked on a voluntary business rescue at the end of July 2021 and has not flown since then. Creditors have a debt of R2.85 billion and an outstanding ticket liability of about R183 million. The airline will not be able to resume operations until and without ensuring that new investors have reopened the airline.

Coronavirus pandemic ground air traffic blockade restrictions on SA have been suspended since March 26, 2020. Mango resumed operations on June 20, 2020, after travel restrictions were relaxed. However, it still had a serious impact on Mango’s business, and on April 16, 2021, the Board of Directors adopted a resolution covering Mango as a business bailout.

Potential investors who have submitted a statement of interest will acquire all of the shares currently held by Mango’s parent company, State South African Airways (SAA). The bailout plan stipulates that in order for Mango to reopen its business and provide the necessary working capital, it must show that investors who want to buy a company have access to at least 200 million rants.

The process of finding investors began on December 2, 2021, after the majority of creditors adopted a modified bailout plan. Currently, the expression of interest is being evaluated by Sono to see if it complies with the previously set minimum requirements.

Prior to January 14, 2022, Sono will notify interested parties whether the relevant requirements are substantially met, according to a letter calling for a statement of interest. Qualified individuals can initiate their own due diligence process and are expected to submit a binding offer in writing by February 21, 2022.

Offers are based on criteria such as the price offered, the certainty and speed of completion of the proposed transaction, the scope of changes proposed in the contract, the method of payment of the price, the ability to raise funds and the source of funding. Will be evaluated. Operational capabilities, B-BBEE status, support from mango managers, staff impact, and existing potential conflicts of interest between providers and mangoes.

Sono believes there is a reasonable outlook to bail out the company. Or, we believe this will have better results for creditors and SAA than if the airline were liquidated.

According to the latest status report from Sono, 520 million of the 891 million Rands allocated to Mango from the relief fund finance provided to the SAA were received.

A letter asking about the remaining balance was addressed to the SAA in early December. Next, SAA asked its shareholder, the Public Enterprise Authority (DPE), when the balance would be paid. According to the latest status report, the remaining balance is expected to be sometime in January.

Mango’s originally proposed rescue plan wanted to use some of the funding from the SAA to resume mango operations. However, DPE and SAA have stipulated that mangoes cannot use the funds to reopen their business. So Sono was looking for an investor to get the airline back on track.

The process began in October 2021 for the Voluntary Retirement Package (VSP) offered to Mango employees. According to the status report, a total of 593 people were accepted and the employee complement was reduced to 105.

A consultation process with a view to reductions will be initiated among the remaining employees. Until the company reopens, a total of 41 employees remain on limited-time contracts to perform important duties.

Some potential investors are enthusiastic about mango, says rescue practitioners

Source link Some potential investors are enthusiastic about mango, says rescue practitioners

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