In an eleventh-hour move, South Africa's Public Enterprises Department is appealing a court-ordered October 6 deadline to decide on a bid for Mango Airlines (MNO, Johannesburg O.R. Tambo) but denies it is trying to stall or undermine the potential rescue of the state-owned budget carrier.
"The intention of this application is to ensure that all aspects of Mango's business rescue process are transparent, legally sound, and in the best interests of the South African public. This is not a stalling tactic or an attempt to undermine the need to bring finality to Mango's business rescue process," it said in a statement on October 2.
On September 6, the South African High Court in Pretoria gave Public Enterprises Minister Pravin Gordhan 30 days to approve or reject a ZAR326 rand (USD17.25 million) binding offer for Mango from South African consortium Ubuntu Air Services. The court ruled that Gordhan's 10-month delay in deciding the matter was unreasonable and unconstitutional. The court action was brought by Mango's business rescue practitioner (BRP), Sipho Sono, who warned that the minister's recalcitrance was putting the rescue deal at risk.
On September 13, Gordhan reacted defiantly to the court order, saying he would proceed based on legal advice. Two weeks later, his department announced it had decided to appeal the court order following legal advice received. It reiterated that Gordhan still awaited from Sono information that would enable a decision under the Public Finances Management Act, including a detailed business plan to assess the consortium's viability; comprehensive due diligence; and foreign ownership details to comply with South African laws.
Sono declined to comment when approached by ch-aviation. In the lawsuit, he stated he had supplied all answers to Gordhan. Under the South African Companies Act, the choice of a preferred bidder is left to the business rescue practitioner, he said.
The High Court order supported this. "The BRP, who is in full control of the management of the affairs of Mango Airlines, has responded to the effect that he will not supply any additional information. Consequently, the PE Minister, as the relevant treasury, must act with the information at his disposal and either approve or reject the application," the court ordered.
