Mango in business rescue.

[Airframe driver]

And so the saga continues...

Mango Airlines to enter business rescue, says SAA interim CEO

https://www.news24.com/fin24/companies/ ... o-20210726

[GL]

South African Airways (SAA) subsidiary Mango Airlines will enter into a local form of bankruptcy protection known as business rescue, SAA's interim chief executive Thomas Kgokolo told eNCA television on Monday.

SAA, which itself exited business rescue in April, is one of a handful of South African state companies that depended on government bailouts, placing the national budget under huge strain.

"What we can say is that the board and shareholders have agreed that Mango will go into business rescue," Kgokolo said in an interview with eNCA.

"We are currently in consultation with our key stakeholders in terms how we can manage that particular process."

The government announced in June that it was selling a 51% stake in SAA to the Takatso consortium to give the airline a new lease of life.

SAA had been under a form of bankruptcy protection since December 2019, but its fortunes worsened during the COVID-19 pandemic and all its operations were mothballed in September 2020 when funds ran low.

[HJK 414]

And so the saga continues...

Mango Airlines to enter business rescue, says SAA interim CEO

https://www.news24.com/fin24/companies/ ... o-20210726

I would not be surprised if we see Les Matuson appear on the horizon again ...
Such a flexible partner for the DPE deserves a second windfall.

JK

[Jfairwell]

And so the saga continues...

Mango Airlines to enter business rescue, says SAA interim CEO

https://www.news24.com/fin24/companies/ ... o-20210726

I would not be surprised if we see Les Matuson appear on the horizon again ...
Such a flexible partner for the DPE deserves a second windfall.

JK

With Mango's liabilities apparently between R3bn and R6bn it will probably be the sacrificial lamb in the so-called privatisation of SAA with Lift emerging as the low cost carrier brand.

[Volo]

Cunning lot - Hang them out to dry for a year " al la BRP" and then throw them under the bus with their creditors pilots and all .

[GL]

With Mango's liabilities apparently between R3bn and R6bn .......

Fascinating - do you have a source for the R3 - 5Bn?

[Jfairwell]

With Mango's liabilities apparently between R3bn and R6bn .......

Fascinating - do you have a source for the R3 - 5Bn?

Paragraph 57 of the application for business rescue notes liabilities of R2.5 billion, but that's before the redelivery obligations to lessors. Lessors reckon not less than R6 billion in total.

[Jfairwell]

According to the application, Mango owes -

- Various lessors R1,101,306,894
- SAA Technical R718,087,132
- ACSA R156,800,880
- ATNS R57,724,671
- Lanseria R14,218,864
- SARS R77,095,064
- Salaries R107,692,724

[GL]

With Mango's liabilities apparently between R3bn and R6bn .......

Fascinating - do you have a source for the R3 - 5Bn?

Paragraph 57 of the application for business rescue notes liabilities of R2.5 billion, but that's before the redelivery obligations to lessors. Lessors reckon not less than R6 billion in total.

Thank you! Much needed excellent gen -
On high utilization (Nico told me he was getting plus 12 hours / day) 20 year old a/c the end of lease (Redelivery?) costs must be huge.

[evanb]

I would not be surprised if we see Les Matuson appear on the horizon again ...
Such a flexible partner for the DPE deserves a second windfall.

I would hazard a guess that since SAA via SAAT is one of the most significant creditors, the court would see this as a conflict of interest and likely block his appointment.

[evanb]

Paragraph 57 of the application for business rescue notes liabilities of R2.5 billion, but that's before the redelivery obligations to lessors. Lessors reckon not less than R6 billion in total.

That seems like a generous estimate of the redelivery obligations, R3.5 billion in redelivery obligations would put it at $26 million per aircraft which is dramatical more than the value thereof.

[Jfairwell]

I would not be surprised if we see Les Matuson appear on the horizon again ...
Such a flexible partner for the DPE deserves a second windfall.

I would hazard a guess that since SAA via SAAT is one of the most significant creditors, the court would see this as a conflict of interest and likely block his appointment.

Mango owes SAAT R718 million. SAA and SAAT are different legal entities, therefore technically no conflict. Organised labour has however recommended the appointment of Mr Lutchman and Ms Mpakati as business rescue practitioners.

Will be interesting to see if this will end up as a voluntary or involuntary application. My guess is that DPE will want to control the narrative as they did with SAA. Lots at stake with the so-called privatisation of SAA and this piece of the puzzle will be key.

[Jfairwell]

Paragraph 57 of the application for business rescue notes liabilities of R2.5 billion, but that's before the redelivery obligations to lessors. Lessors reckon not less than R6 billion in total.

That seems like a generous estimate of the redelivery obligations, R3.5 billion in redelivery obligations would put it at $26 million per aircraft which is dramatical more than the value thereof.

Unfortunately I don’t have access to the detail, but it appears reasonable when considering redelivery obligations and liquidated damages on the aircraft lease defaults.

The bottom line is the company is hopelessly insolvent with liabilities of at least R2.5 billion and counting, trading recklessly and the purported R819 million bailout will not touch sides. Huge haircuts and job losses loading.

[evanb]

Mango owes SAAT R718 million. SAA and SAAT are different legal entities, therefore technically no conflict. Organised labour has however recommended the appointment of Mr Lutchman and Ms Mpakati as business rescue practitioners.

Given that SAAT is 100% owned by SAA, as a creditor, I would object based on a conflict of interest since it would be in SAA's interests for SAAT to be treated better than other credits. Given the materiality of the scale of SAAT's claim, that would certainly present a conflict of interest in my eyes.

[evanb]

Unfortunately I don’t have access to the detail, but it appears reasonable when considering redelivery obligations and liquidated damages on the aircraft lease defaults.

The bottom line is the company is hopelessly insolvent with liabilities of at least R2.5 billion and counting, trading recklessly and the purported R819 million bailout will not touch sides. Huge haircuts and job losses loading.

Agreed, hopelessly insolvent. However, I still think those amounts are ludicrous. Unless those aircraft have 20 year leases (which is a preposterous proposition), there is simply no way that redelivery obligations would put at $26 million per aircraft. The replacement value of the aircraft is less than half of that!