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Monday, 18 March 2024 23:13

Sale of Mango airlines to proceed following SCA ruling.

By Lehlohonolo Lehana.

The Supreme Court of Appeal (SCA) on Friday rejected Public Enterprises Minister Pravin Gordhan's last-ditch attempt to scupper Mango airline sale.

Mango was placed in voluntary business rescue on 28 July 2021, with the BRPs appointed in August of that year.

As part of the business rescue plan, the government, through the Department of Public Enterprises (DPE), wanted to dispose of its shareholding in the group and have the airline snapped up by private investors.

However, when an investor was found – later revealed to be Ubuntu Air Services – Gordhan sought to halt the deal on the grounds that he had not been given enough information to approve the deal.

Ubuntu Air Services is backed by AfricaStay, a family-owned tour operator selling leisure destinations in South Africa and the Indian Ocean islands, Zanzibar (Tanzania), and Livingstone (Zambia). The company has said that acquiring Mango is a strategic opportunity to diversify and complement its existing business.

In the Mango deal, the minister was seeking a detailed business plan for the airline, as well as details on foreign ownership, among other information.

The BRPs argued against this, saying that should the deal proceed, the new business would be in direct competition with South African Airways, and giving access to Mango's business plan would put it at a disadvantage.

The matter eventually ended up in court, with the BRPs trying to get a court order compelling Gordhan to either approve the deal or reject it so that Mango could be either rescued or wound down.

When the courts ordered Gordhan to make a decision within 30 days, the minister took the matter on appeal, which he lost. He then took it to the Supreme Court of Appeal, which he again lost.

BRP practitioner Sipho Sono said, he was now free to implement the deal after two SCA judges on March 14 rejected the government's late appeal against an earlier High Court order compelling a decision on the sale. 

The loss at the SCA follows the South African Airlines deal with the consortium Takatso also falling through this month, and the loss-making airline remaining 100% on the government's books.