The financial crisis of Mango has worsened as the low-cost airline owes creditors, including aircraft lessors, and hasn't paid full salaries to its workers for more than a year. There is increasing pressure for Mango to voluntarily submit itself under business rescue.
Mango Airlines is set to follow in the footsteps of its parent company, SAA, as the low-cost airline faces the prospect of business rescue because it is fast running out of cash, and is struggling to pay creditors and the salaries of its 700 workers.
The financial crisis of Mango delivers another blow to SA's state-owned airline industry.
The business rescue process is governed through the Companies Act and attempts to rehabilitate the affairs of financially distressed companies. The process also gives a company breathing room as payment obligations to creditors are suspended while its operations are being restructured.
A business rescue process for Mango could be voluntary or involuntary.
It appears the process will be voluntary, because the Mango board and the government have agreed to place the airline under business rescue. The government, represented by the Department of Public Enterprises, is the sole shareholder of Mango.
SAA interim CEO Thomas Kgokolo. (Photo: Twitter / @saica_ca_sa)