Mango creditors agree to withhold R85m
Troubled state-owned low cost airline Mango’s creditors have agreed to the decision by its parent company, SAA, to withhold R85m.
The Sunday Independent reports that Mango, which is under business rescue, will decide this week whether to take legal action against SAA following the national carrier’s decision.
According to the airline’s business rescue practitioner Sipho Sono, the vote on the R85m was a result of SAA’s reduction from the R819m funding allocated to Mango in terms of the Special Appropriation Act.
The low-cost airline complained that SAA’s move necessitated steps to recover the withheld money, and amendment to the business rescue plan.
Academics from the University of Johannesburg have questioned the payment of R819m to Mango.
They said the grant of government’s financial aid to Mango was contrary to the assurances regarding equal treatment of airlines and the role of the state and its airlines in an economically deregulated competitive domestic air transport market, as was contained in air transport policies.
Sono earlier commenced litigation to recover the balance of the R819m allocation, but withdrew the litigation once SAA and the Department of Public Enterprises agreed to pay the remaining balance.
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.
