Mango’s business rescue plan halted
The process of reviving state-owned low-cost airline Mango appears to have been stopped after the Gauteng High Court (Johannesburg) declared that its business rescue plan cannot be implemented.
A Cape Argus report notes Aviation Co-ordination Services (ACS) hauled Mango and its business rescue practitioner Sipho Sono to court over the plan to save the subsidiary of SAA.
ACS objected to a payment to the creditors in the plan, stating that the balance of the claims of remaining concurrent creditors will be ceded to the investor at face value, but for nominal consideration.
It also indicated that the concurrent creditors, except the SARS and the creditors in respect of the un-flown ticket liability, will be paid a ‘top-up’ settlement payment for their claims. This meant that the majority of the creditors would be paid 4.43 cents to every rand.
ACS complained that the estimated settlement would translate roughly to R44300 per R1m, a return which is negligible, if not nominal.
Judge Denise Fisher found that ‘the plan, shorn of its complexity, amounts to nothing more than the confiscation of the creditors’ claims in order that they be transferred by Sono to an investor who pays no value for them or the shares.
‘The compulsory cession contained in clause 6.2.6 of the business rescue plan is declared to be invalid and of no force and effect. It is declared that the business rescue plan cannot be implemented,’ the judge ordered.
Fisher said Sono’s opposition of ACS’s application was unmeritorious.
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.
