Mango Airlines' administrator plans to launch a legal bid against the Minister of Public Enterprises to compel him to decide on the application to sell the airline.
Mango's parent company South African Airways (SAA), has been looking to sell the airline for nearly two years. After entering voluntary business rescue in July 2021, Sipho Sono, a senior Business Rescue Practitioner (BRP), was appointed as Mango's provisional liquidator to find investors.
Last year, SAA applied to the Minister of Public Enterprises, Pravin Gordhan, to sell the budget carrier. Due to unresolved queries and deadline extensions, Gordhan finally had until the end of January to respond but has not done so.
Last month, Sono wrote a letter to Gordhan stating that he had given the minister enough information and time to decide on the application. He also told the public that the minister's delay jeopardizes the mission to get a deal as the preferred bidder expressed a desire to withdraw from the transaction if a decision was not made by February 28.
Approaching the court for relief
After receiving Sono's letter, the Minister of Public Enterprises responded by saying that he would not decide on the application until South African Airways provides him with the information he asked for. He added that the BRP had no authority to address correspondence directly to him with respect to the application.
As the future of the low-cost carrier depends on the minister's approval, his response left Sono with just a few options: doing nothing and hoping that the minister will change his mind, approaching the courts for relief, or instituting the wind-down process. After taking legal advice, Sono has resolved to institute urgent legal proceedings against the minister to urge him to make a decision on the application.
With these latest developments, the potential investors willing to walk away by the end of the month said that they would not do so until all legal proceedings brought against the minister are finalized. SAA and Mango plan to bring the case to the North Gauteng High Court in Pretoria to prove that both parties submitted a valid and complete application to the Department of Public Enterprises.
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Mango's future and possible outcomes
On February 5, the BRP received a notice from the International Air Services Commission (IASC) informing him that the IASC had resolved to cancel Mango's license immediately. Sono understands that one of the reasons for the IASC taking this position is that no decision has yet been made on the application by the minister. He also believes that the notice does not provide sufficient reasons for the decision taken, a requirement under the International Air Services Act, No 60 of 1993.
As a result, Sono intends to write to the IASC to request detailed reasons for the council's decision to terminate Mango's license, specifically in this situation where the IASC is aware of his plan to approach the courts and take legal action against the minister. Due to the position of the preferred bidder and the aviation council, the application to compel the minister has been brought up urgently.
Sipho Sono is hopeful that the minister will decide on the application in the next two months. Despite the BRP's best efforts to save South Africa's budget carrier, he would have to initiate the wind-down process if the legal action fails. The wind-down process would force Mango into liquidation and dismiss hopes of seeing the colorful airline grace the South African airspace again. Mango takes the position that this would predominantly be because the minister failed to make a decision within the statutory timeframe.
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