Mango Airlines (MNO, Johannesburg O.R. Tambo) has received ZAR225 million rand (USD14.8 million) or 72.5% of an outstanding state allocation after the administrator of the stricken state-owned budget carrier threatened to take the South African government to court.

In his latest report to creditors, Mango administrator Sipho Sono confirms he has dropped an urgent application in the Gauteng High Court against Mango's shareholder representative Department of Public Enterprises (DPE) and parent South African Airways (SA, Johannesburg O.R. Tambo) following the successful transfer of the money. He has also advised creditors not to pursue further legal action for the settlement of the remaining ZAR85 million (USD5.5 million) as the suit's outcome would be unpredictable.

Meantime, the investor process is progressing according to the time frame agreed with the as-yet-unnamed preferred bidder. Sono anticipated the (unspecified) purchase offer to be deposited before the end of June 2022.

On April 7, 2022, four binding offers from qualifying bidders were received for Mango. Two were found to substantially meet the requirements. A preferred bidder and a reserve bidder were selected. "In the event that the preferred bidder is unable to fulfil the conditions of the transaction agreements, the reserve bidder will be approached to conclude the transaction," Sono said.

If the transaction cannot be concluded, he will have to implement the winddown plan incorporated in Mango's business rescue plan. Still, he believes that "there is a reasonable prospect of rescuing the company".

Mango is currently in voluntary administration while it seeks a new strategic investor. This follows the decision by SAA to sell off its low-cost subsidiary. Mango was severely impacted when SAA entered bankruptcy protection in December 2019 and the ensuing COVID-19 pandemic. It was allocated ZAR819 million (USD53.4 million) from a ZAR10.5 billion (USD685 million) state bailout granted to SAA. The funding was to help cover its debt and pay for its restructuring. When it entered administration, its debt burden stood at ZAR2.8 billion (USD182.7 million) with forward sales and un-flown ticket liability of ZAR183 million (USD11.9 million).

However, following delays by SAA to transfer to Mango the balance of its allocation, Sono, on May 10, 2022, filed an application in the Gauteng High Court for the release of the funds. He also met with Public Enterprises Minister Pravin Gordhan on the same day to resolve the matter. According to Sono, Gordhan said there was a need to redirect some of the allocation to other pressing government needs. DPE and SAA first proposed that ZAR100 million (USD6.5 million) be retained by the parent airline, but Sono had only agreed to ZAR85 million. On that basis, ZAR225 million was paid to Mango, and Sono had agreed to withdraw the court application.