Deadline extended for Mango’s shortlisted bidders
Shortlisted bidders for South Africa’s stricken state-owned budget carrier, Mango Airlines (JE, Johannesburg O.R. Tambo), have been granted more time to comply with financial requirements after none provided an acceptable form of proof of funding.
This is according to a January 14 letter to potential investors from the airline’s administrator, Sipho Sono, and cited by Fin24.
As reported previously, expressions of interest from prospective investors had to be submitted to Sono by December 20, whereupon shortlisted parties were notified accordingly on January 14, 2022. According to the original timeline, they were required to complete their due diligence of Mango by February 14, with binding offers to have been submitted no later than February 21, 2022.
Sono was not immediately available to clarify how the extension for the submission of financial requirements would impact the timeline. The selection of the investor will remain at the sole discretion of the administrator.
He earlier stated the aim was to find an investor for Mango by the end of March 2022, but the company would not resume operations until it secured a new owner.
Mango has been in voluntary business rescue since July 28, 2021. It has been mothballed after its parent, South African Airways (SA, Johannesburg O.R. Tambo), decided to sell off the subsidiary.
In his latest monthly status report dated December 31, Sono confirmed that “a number of expressions of interest” from potential investors had been received, which he and his team now were evaluating for compliance with the minimum requirements set out in the bid process letter issued to prospective investors. “Bidders that substantially meet the requirements will be invited to commence their due diligence imminently, after which the prequalified bidders are expected to submit binding offers in February 2022,” he said.
He remained of the opinion “that there is a reasonable prospect of rescuing the company”, or that the proceedings would result “in a better outcome for creditors and the shareholder than would otherwise be achieved should the company be placed in liquidation”.
Sono was expecting to receive this month the remaining balance of ZAR399 million rands (USD25.8 million) of ZAR819 million (USD53.1 million) in state funds allocated to Mango in terms of a Special Appropriation Act in 2021.
Meanwhile, 593 employees have opted for voluntary severance packages. A total of 41 employees have been retained on limited-duration contracts to carry out critical duties, he added.