Mango Airline business rescue process: DPE & SAA briefing, with Deputy Minister

This premium content has been made freely available

Public Enterprises

14 September 2022
Chairperson: Mr K Magaxa (ANC)
Share this page:

Meeting Summary

Video

Mango Business Rescue

The Portfolio Committee on Public Enterprises met on a virtual platform to receive a briefing from the Department of Public Enterprises and the board of South Africa Airways on the status of the business rescue of Mango Airlines.

The Department explained that Mango had been placed in voluntary business rescue on 28 July 2021 and an amount of R890 million was allocated for the restructuring processes through the special Appropriations Act. Mango had intended to resume operations in December 2021 with a reduced fleet and a reduced staff complement but that plan had been amended and Mango would only resume operations once an investor came on board. Mango had been unable to commence operations as it did not have working capital and the fiscus was too constrained to put up the capital needed for the resumption of operations. The amended plan was adopted at a creditors’ meeting on 2 December 2021. In addition, Mango’s licences had been suspended, making it impossible for the airline to fly. Several investors had shown interest but it came down to proof of the requisite funding, which had led to the identification of a single investor. A Public Finance Management Act application had been made and the investor had to be approved by the Competition Commission and the Regulatory Authorities before processes could continue.

Questions by Members showed that the presentation had not provided them with a full understanding of what had happened in the Mango process. They asked if they would have to find out what had happened to Mango via the newspapers, as had been the case with the SAA sale. Members were concerned about what would happen to Mango if it could not attract a business investor. Why had there been a change that had forsaken the original restructuring process for a business rescue process? Why had Mango stopped operating when the airline could have continued to operate? Why had the state decided to sell Mango when it was a lucrative business, and especially when government had allocated funds for restructuring Mango? What were the reasons behind the decision of the SAA board to propose an adjournment of the planned resumption of Mango’s operations? Was it anything to do with Lift Airlines being partnered with SAA in the Takatso deal? Was that decision not against Competition law as it obstructed competition while decisions were still being made on the Takatso deal? Were there any Chinese walls between the teams negotiating on the Takatso deal and the ones deciding on the sustainability of Mango? When the Takatso deal was finalised, would Lift Airlines be part of the deal and would Mango Airlines be sacrificed for Lift? When the plan was drafted, had the practitioner not realised that the investor was so critical that Mango could not take off without the investor?

Why were the allocated funds not used for Mango and how did Mango fall by the wayside in that regard? Why did the Mango business rescue practitioner have to take the Department to court for the payment of the funds? What had been the main reason for the disagreement? Was it about exorbitant fees? Why had R85 million been retained? What had been the role of the Department in the business rescue process? On the issue of aircraft lease cancellations, were there legal fees or was money lost in that process? How would the suspension of the Operating Licence affect Mango? Were experiences from SAA transferred to Mango to support the process? Had all the boxes been ticked? If Mango was a loss-making SOE, why would the private sector be interested in buying the airline? Was there something that the Committee did not know that the private sector knew?

Government had invested so much in the airline, but what did government get out of it? Did it mean that everything went down? What was the end of the bargain insofar as government was concerned? Was the intention to sell Mango totally, with no public interest in the business?

Meeting report

Opening Remarks
The Chairperson stated that the Interim Chairperson of South African Airways (SAA) would be leading the delegation as Mango was an entity within the SAA. The Deputy Minister would join the meeting when he landed in the Eastern Cape.
Overview by SAA Interim Board Chairperson
Prof John Lamola said according to legal prescripts. Mango Airlines had been in abeyance since the appointment of the business rescue practitioner (BRP) on 2 August 2021. He intended to apprise the Portfolio Committee on the developments within the South African Airways and all aspects of its activities, which in that particular instance related to the subsidiary, Mango Airlines.

Adv Makobe would be leading the presentation which had been prepared by and received from the BRP.

Presentation on Business Rescue by the Department of Public Enterprise (DPE)
Adv Melanchton Makobe, Deputy Director-General: State-Owned Companies Governance Assurance and Performance, DPE, began by recapping the background events. He assured Members that he would discuss the original plan and the changes that had been made to the original plan to re-commence operations in December 2021. Mango was placed in voluntary business rescue on 28 July 2021. An amount of R890 million was allocated to Mango for the restructuring processes through the special Appropriations Act. Mango had intended to resume operations in December 2021 with a reduced fleet and also a reduced staff complement, initially from 708 to 412 employees. That plan was amended so that Mango would only resume operations once an investor came on board and because the fiscus was very constrained and would not be able to put up the capital needed for the operations to have resumed at that time. The amended plan was adopted at a creditors’ meeting on 2 December 2021. A VSP (voluntary severance package) and attachments in terms of section 189 of the Labour Relations Act had effectively terminated all employment contracts. Aircraft leases were cancelled and aircraft returned to the lessors. As licences had been suspended, those would have to be negotiated once there was an investor.

An investor had been identified but a Public Finance Management Act (PFMA) application had to be made and the investor had to be approved by the Competition Commission and the Regulatory Authorities before processes could continue. Parties had been required to provide proof of funding and many bidders were not able to provide proof of funding. There were currently six bidders under consideration but unsolicited bids could be accepted at any time. Determining proof of funding was an extensive process before the bidders could even undertake due diligence.

R819 million was allocated for the restructuring of Mango. R85 million had been withheld, permanently.

(See Presentation)

Discussion
Ms C Phiri (ANC) stated that it was a worrisome picture. If Mango could not attract a business investor, what would happen to Mango? How would the suspension of the Operating Licence affect Mango? She requested an update on how the R100 million had been spent. Regarding the local content of the BPR deal, she asked for more information. The presenter had said that there was value in Mango but she, personally, did not see any hope for Mango.

Mr F Essack (DA) asked why Mango had stopped operating when the airline could have, in his opinion, continued to operate. Was it anything to do with LIFT Airlines being partnered with SAA in the Takatso deal? Was that decision not against Competition law as it obstructed competition while decisions were still being made on the Takatso deal? Were there any Chinese walls between the teams negotiating on the Takatso deal and the ones deciding on the sustainability of Mango? Those were key issues, in his opinion, as key decisions seemed to be detrimental to SAA and to Mango. Why did the Mango BRP have to take the Department to court for the payment of the funds? What had been the main reason for the disagreement? What had been the role of DPE in the BRP process? Why had the state decided to sell Mango when it was a lucrative business, and especially when government had allocated funds for restructuring Mango? When the Takatso deal was finalised, would LIFT Airlines be part of the deal and would Mango Airlines be sacrificed for LIFT?

Ms J Komane (EFF) said she was disadvantaged by load shedding and would write her questions down.

Mr N Dlamini (ANC) stated that the report did not give one much confidence that Mango would be assisted. Why was the money that was allocated not used for Mango and how did Mango fall by the wayside in that regard?

Ms J Mkhwanazi (ANC) asked for an explanation of the investor process and the timeframe and whether there was a potential investor. What was the timeframe to finish the whole process? On the issue of aircraft lease cancellations, were there legal fees or processes around that or was money lost?  Were there any lessons learned in the process? Were experiences from SAA transferred to Mango to support the process?

Mr S Gumede (ANC) believed that the R819 million was part of the R10 billion for SAA BRP. The R819 million was not for the business rescue process, it was for a normal restructuring process, i.e. resuscitating the board and paying staff and whatever was necessary to get the airlines back in the air. Why had there been a change that had forsaken the original process for a BRP? He would be happy if it was a strategic change. Mr Dlamini had a similar understanding of the process. He asked for an explanation.  

Mr Gumede understood that the routes were to have re-commenced on 21 December but SAA had brought that to a standstill. That came with quite a lot of repercussions which brought about many risks. He did not believe that the recommendation to delay was an honest process as it had delayed processes. SAA had realised that Mango might take off too soon. He thought the delay was to avoid Mango having an advantage over SAA. When the plan was drafted, had the practitioner not realised that the investor was so critical that the aircraft could not take off without the investor? That was what SAA was arguing. Was it an omission that the investor was not identified as critical in the original plan? Why had that changed? That was what should be explained.

Mr Gumede asked if the BRP was happy with the change in the plan. There were timelines and if you did not keep to the timelines, you were not going to achieve your goals. The December 21 deadline was missed and those operations were then put aside with the effect that all 410 staff were retrenched and then it was a zero kind of employment, with the only four contractors that were left to make sure that they managed the situation. He wanted to be taken into the confidence of DPE and the SAA board because everyone in the meeting worked as a team. Amongst the six bidders, be it in the view of DPE, Mango or the BRP, which bidder had the best chance in terms of capacity, finance, technical skills, etc?  At least Members needed to know how that was going to help. If the Committee was primed, at least it could say it was part of the situation. He did not want to see the same errors as had occurred with SAA. Was the process really on track with the timelines? Had all the boxes been ticked? He understood that there were processes to be followed, but was everything on track with the bidder?

Mr Gumede remarked that, previously, the delay was caused by the exorbitant charges of the BRP. The Committee had still not received an update from the SAA on those costs. Why were there negotiations with the DPE? Was it about exorbitant fees? Also, what was the point of retaining R85 million? What was it for? Had it been thumb suck budgeting? How could one have a tight budget and still be able to cut R85 million? What was strategic about the delay of the BR plan? When did they anticipate a resumption of operations? If the project was successful, he would be pleased to see those people from Mango being re-employed if they did not have employment. The risks were enormous but they seemed to come from the amendments mooted by SAA.

Mr Essack noted that Adv Makobe had said there was value in Mango but asked what had motivated the withholding of the R85 million.

Ms J Tshabalala (ANC) understood that the planned resumption of the airline was intended to rescue the airline. The most important element of Mango Airlines BRP involved, in her understanding, an attempt to save the airline through the planned resumption of operations in December 2021. And the planned resumption of operations was predicted on four factors and those factors, obviously, were to restart flight operations in December 2021 for the airline to generate ticket sales revenue. The second reason given was to reduce the headcount of employees from 718 to 412 through the voluntary severance packages. Thirdly, it was about the resumption of operations with eight aircraft and granting vouchers to passengers who had bought tickets before Mango had gone into BR.  In practice, the planned resumption of operations meant that Mango could begin operations without generating private sector interest. However, the SAA board was obviously against the plan to resume operations as it was convinced that Mango could not restart sustainable operations before the introduction and onboarding of a strategic equity partner, and with the requisite funding. Consequently, the planned resumption had to be amended, and now the amended BR plan indicated that Mango would be sold 100% to a new investor. That was why she had a fundamental problem.
However, Ms Tshabalala asserted that the important element of Mango’s business rescue plan was that if the airline failed to attract private sector buyers, the airline would be down, which would involve selling its assets to pay creditors. And at the moment, Mango had not concluded the investor process, and that might lead to the depletion of the remaining allocated funds from the Special Appropriation Bill before the investor process was concluded.  A person or investor had been identified and the issues were being handled. However, Mango’s assets were substantially less than the R2.8 billion it owed its own creditors. In other words, should Mango fail to attract private sector buyers, if the current process failed, it would struggle to sell it assets to pay the creditors. Furthermore, one of the cited reasons as to why Mango’s assets were insufficient to cover the outstanding debt was primarily because the airline did not own, but rather leased, its fleet of aircraft.  She was worried about that matter because that was where they had found themselves with SAA. The Committee had to read in newspapers and so forth that SAA was sold for nothing. What was going to happen with Mango?
She said that the issues for consideration were that the initial business rescue plan indicated that Mango could not resume operations while in state ownership, but the SAA board was ultimately paving the way for private sector players to provide the airline with capital and to buy it. But what were the reasons behind the decision of the SAA board to propose an adjournment of the planned resumption of Mango’s operations? Experience showed that the private sector was not interested in buying unprofitable SOEs.  If Mango was a loss-making SOE, why would the private sector be interested in buying the airline? Could Adv Makobe or prof Lamola explain? Was there something that the Committee did not know that the private sector knew?
She also noted that the amended BRP plan indicated that the investor would hire new staff based on the operating model of the Mango airline. Would there be any attempt on the side of the DPE to ensure that the investor retained some of the employees that had exited via the VSP? Lastly, the plan indicated that money had been set aside to pay creditors. Given that Mango currently owed creditors R2.8 billion, the funds received from government were not enough to pay those creditors. Did that mean that Mango would request funding from the government to pay its creditors if the investors were not forthcoming? That was a very important question because quite often, as an ANC Member of Parliament, one found oneself having to debate such appropriations and the opposition came down very hard on the ANC when the government paid billions in terms of rescuing SOEs that were not profitable. She wanted to know, very clearly, if it meant that more funding would be requested from the government to repay creditors should there not be an investor. Government had invested so much in the airline but what did government get out of it? Did it mean that everything went down? What was the end of the bargain insofar as government was concerned?
The Chairperson asked, taking into account that Mango was more viable since it was a low-cost airline and, as such, had more value, why SAA could not take Mango into its fold as part of the same deal. The lower middle class targeted the low-cost airlines and they were still standing, even after COVID. Why would SAA not consider taking over Mango? Could the Chairperson of the Board clarify? There was no talk about the state or the public having an interest in the ownership of Mango, so his view was that the intention was to sell Mango totally, with no public interest in the business. Was that the intention?

Prof Lamola stated that he would remind the Committee of the history that had brought the airlines to where they were, touching both on the performance, the history of Mango well as the legalities, the processes that were followed and the objective of the BRP as well as the consequences. SAA was a group with four subsidiaries, but only SAA as an airline was taken into BRP and not the entities: SA Travel Centres, Air Chefs, SAA Technical, and Mango. The entity that was brought into business rescue was SAA, as the Airline, in March 2020. Mango and the subsidiaries were not brought into the business rescue process. The rescuing of South African Airways was to decouple it from a dependence on the fiscus. That was a separate process.

He agreed that Mango was a low-cost carrier (LCC) and the theory was that the low-cost carriers were supposed to be more agile and more profitable, etc., but the reality was that the board of SAA was the holder of 100% of the shares in Mango, and as such, had to deal with the performance of Mango. Around April/ May of 2021, which was at the start of the financial year, it was faced with the fact that Mango was not profitable. According to the financial year-end results of March 2019/2020, Mango posted a loss of about R134 million. The following year, 2020/2021, Mango had posted a loss of about R500 million, and at the time, there was the whole challenge of COVID. Like all airlines, Mango was grounded from the end of March 2020 during the hard lockdown and had attempted to get back into operation at the end of June 2020. By that time, Mango had shown a two-year loss and Mango had to face a very difficult operating environment.

At that time, he was provided with a forensic report that had been requested by the board of Mango in 2017/2018 and which indicated that its financial records of 2016/2017, showing that Mango had made a profit of R105 million, was utterly questionable. That forensic report was still live to a degree because, when Mango was taken into business rescue, the board of SAA had submitted that report to the BRP with a request that the BRP take into account the fundamental architecture of the financials of Mango in the financial rescue process for Mango. The financial performance of Mango was very negative and very dire, to the point that in May 2021 one of the creditors made an application for the liquidation of Mango. As a defensive position, the board of Mango passed a resolution requesting government as the ultimate shareholder to put Mango into business rescue to obviate a messy situation where the creditors of Mango would put it into liquidation. The SAA board had been waiting for permission from Treasury and others but by July, Mango’s situation was deteriorating. Mango could not pay Air Traffic and Navigation Services (ATNS) for navigation and ATNS wanted to ground Mango. The situation was so bad that in July 2021, the two unions at Mango made an application to the High Court for Mango to be put into business rescue. The SAA board had to go to court to inform the unions that Mango was not in charge of the appointment of a business rescue practitioner. The board wanted to ensure that the process would be conducted soberly and in a way that would ensure that all the stakeholders were taken care of. The point was that there was no willy-nilly or any agenda or any other motives for BR, other than the performance of Mango. That should also address the suspicions about Lift and the Takatso consortium. He emphasised that when a company went into business rescue, the business rescue practitioner took complete control, to the degree that the board was essentially put on ice.

Prof Lamola explained that from 2 August 2021 when Mr Sono was appointed as the BRP, the SAA board had become a secondary informant and had to request information from the BRP. The board was in a fortunate position because one of its subsidiaries, South African Technical, was one of the creditors of Mango and therefore the SAA CFO sat board had a seat in the creditors' committee which meant that the board was informed about what was happening. He put on record that, because of that situation, the board did not have the kind of relationship with the BRP that it would ideally have wished for. It had to ask for information from the BRP and that was epitomised by the events of 7 October 2021 that Members had alluded to, when the board was horrified to learn that the BRP for Mango was intending to start operations. The board was aware that the market conditions in South Africa at the time were so bad that Mango would not be sustainable based on the airline economics information possessed by the board. SAA had started operations on 23 September 2021 and was dealing with very difficult conditions in the market. By that time, even Comair BA was in business rescue. Fortunately, the board had managed to get concurrence with the BRP that Mango should not start operating in December. During that December, there was a second wave of Covid, known as the Omicron variant and the whole of the South African domestic airline industry was grounded. That would have been a huge disaster for Mango, especially as it did not have any assets in terms of owning a fleet or having aircraft on its balance sheet. It intended operating with leased aircraft, and one of the leasing companies had triggered a process where all the lessors were already taking their aircraft back. By December, Mango had a liability of R2.8 billion, including R130 million which was a not-flown ticket liability, which Mango owed the public that had bought tickets before June to fly with Mango.

Prof Lamola reminded the Committee that the historical performance of Mango had not been profitable and that it had accumulated a huge debt of R2.8 billion. It couldn't pay its contracts, the lessors were withdrawing their aircraft and ATNS was grounding Mango. The situation was very dire. The BRP was a watered-down process of liquidation, akin to the section 11 protection in the United States. If one spoke about the brand value of Mango, that value was with its customers, especially via social media. Those ticketholders would be included with concurrent creditors and, according to how the process worked, the R250 million had to be split among themselves based on the waterfall principle. That meant there was a pecking order where, for instance, SA Revenue Service would have to be paid first, secured creditors like the banks would be paid next and after they had been paid, there would probably be about R150 million which the R2.8 billion credit holders of Mango were going to have to split among themselves. The comfort of the mechanism of BRP was that the shareholders and state were protected from comebacks. The creditors had already accepted that they would receive four cents out of every Rand. Mango would be closed down and no one would owe anyone any money.

Prof Lamola responded to the question of why a private investor would be interested in a company in such a state. The board had persuaded the BRP that Mango be taken to the market so that the market could decide. If a strategic equity partner could invest in Mango, at least the ultimate dividend that would be paid to the creditors would be more than four cents in a Rand. SAA Technical was owed about R400 million, which would have to be written off, for servicing of Mango aeroplanes, etc. So, that was the idea behind putting Mango on the market.  The risk that private sector investors might want to take on Mango was a real risk. The South African domestic airline market was not a safe market and had very serious risks. An analysis of the market shows that there was an element of over-capacity in the market and more aircraft and more airlines were deploying aircraft and chasing routes in the domestic market, and that was not sustainable according to the law of supply and demand. The prices would go down. Most of the airlines, including SAA, had been running routes at a loss for a number of years. It happened in the industry. When SAA had started operations in September, it had to do market development by running a number of routes at a loss. So as much as one could say there was value in Mango, there was a chance that the BRP was sitting with a proposed investor who had a viable solution that would ensure that Mango would fly again. But the market conditions were such that any investor would have to be very creative. Of course, everyone would be happy if an investor had enough money to improve on the dividend and be able to re-employ some of the staff so those skills were not lost to the airline industry. However, an investor would need funding to run an airline for quite some time before it became sustainable.

Prof Lamola itemised the obstacles to getting Mango running, the first obstacle being the Air Service Licensing Councils. Mango’s licence had been suspended for a period of two years and there was a risk with the operating licence of Mango because to sustain an airline operating certificate, the airline had to undergo an audit by the South African Civil Aviation Authority and in that audit, it had to prove that it had post holders, that is key staff that will ensure an airline was going to be run safely and sustainably. Mango, currently, did not have post holders to satisfy the requirements. The view of the BRP was that it was not a serious threat to a bidder, but SAA believed it to be a very serious risk. Concerning the timelines, the board, which was funding the process as the monies from the BRP went through the books of SAA, was concerned that the process should not be prolonged unnecessarily because the more it was prolonged, the more money it cost. The board was putting pressure on the business rescue practitioner to conclude the process as soon as possible. When the board received the section 54 application with details of the bidder, it did not want to have to go through a long process of regulatory checks that would exhaust the R890 million, and that was the reason for the retention of the R85 million. SAA had come out of a BRP process where the dispute over fees charged by the BRP became a matter of public discussion in the media and the board was trying to avoid such a situation with Mango. The board wanted the process to be wrapped up swiftly and in a way that all parties would be happy.

Adv Makobe responded to the question about the nature of the deal.  As indicated, once the application was presented to the DPE, it would evaluate the deal as the shareholder had to negotiate the deal and decide on the appropriate terms. As shareholder, the DPE would make sure that the deal met the conditions and that it was viable in a commercial sense. If it was not, then other options would be considered. Looking at the offer, DPE would consider whether it was a fair offer and whether government was getting the best value out of it and then the Department would engage in negotiations which, when complete, would be reported to the Committee.

In respect of the BRP taking the Department to court, Adv Makobe explained that before DPE released the money, it wanted to understand how the money would be utilised. DPE was quite strict in terms of how the money could be used. Even though the money had been appropriated, the Department wanted to be sure that the BRP was being frugal in spending taxpayers' money. The negotiations with the BRP had led to DPE retaining R85 million of taxpayers' money, which had to be celebrated because the BRP had negotiated with the creditors and cut places where the money would be dispersed. It was a tough negotiation process because and until DPE had an agreement which the BRP had presented and sold to the creditors, it had not been prepared to hand over the funds.

Why would people be interested in Mango? Adv Makobe agreed that it did not have a lot of tangible assets, except that it had the brand -  the name Mango was quite important. For that reason, it had been necessary to ensure that the licence and the routes would be available to the investor. If it had been possible to keep Mango going, government would have done that. But Mango could not fly because there was no working capital. Mango was not flying simply because there was no funding.

About the timelines, he explained that, currently, DPE was waiting for PFMA approval. The SAA board and DPE were applying pressure to make sure that that the application came in as soon as possible so they could make the necessary decisions. Regarding the money appropriated for Mango, a savings of R85 million had been made by negotiating it down to remove any excess. Concerning the employees, DPE would negotiate with the investor to prioritise the former employees of Mango. As to other possible investors, Adv Makobe explained that it was simply a question of funding and so the one that had evidence of funding was the one that the BRP was negotiating with.

The Chairperson called for follow-up questions

Ms Tshabalala said that she was encouraged by the response from Prof Lamola and Adv Makobe. Perhaps if that had been done with SAA, they would be speaking a different language regarding the charges of BRP. The Committee had been raising that matter for quite some time.  She understood the issue of accountability regarding the money and how it had been accounted for by the BRP. In the Companies Act, there was a bit of contradiction, and perhaps the legislation needed to be looked at. She implored the Committee Content Advisor to look into it. If it meant a joint sitting with the Department of Trade, Industry and Competition, then that had to be done because the intention was to ensure ease of business but all the business rescue processes, or most of them, ended up with issues of accountability and money appropriated leading to the kind of tug of war they were seeing, while at the same time, there was a restructuring claim that going on. Government and the Department were not always convinced that the Business Rescue Practitioner was putting his foot down and negotiating as firmly as government would wish and, as Prof Lamola had said, it was very difficult to convince the BRP to put his foot down, to be frugal and so forth. She believed that there were other areas that the Committee, as legislators, needed to look at around those processes. She was asking that it be looked into it, perhaps in a closed meeting, to see how the Committee could take the process forward, even if it meant instituting a Private Member's Amendment Bill.

Ms Tshabalala noted that her question on the suspension of the license for two years had been answered by Prof Lamola who said that it did not affect the process going forward, but how did it affect the BRP itself? Lastly, in September 2021, it was reported that R100 million was received from government for the business rescue process. She asked exactly what the process had cost and what it had been used for. Her question did not have to be answered in totality at the moment but she would appreciate a written reply.

Prof Lamola stated that the arena of licences had recently become a hive of activity as two new councils had been established with the resuscitation of the industry following Covid: the International Air Services Licensing Council and the Domestic Air Services Licensing Council. It was a cauldron of what was going on in the industry. It was all about the routes as there were routes flown by Mango, SA Express, that was no longer in operation, and routes flown by SAA, some of which, such as the Zanzibar route, were highly lucrative. The routes were evaluated in terms of how much money they produced and the Councils were inundated by airlines wanting the routes that were now available. There was a scramble for the most lucrative routes.

According to the law, an interruption in a route meant that the Council could cancel the licence. There was a mechanism in law whereby an airline had to regularly submit documents showing financial statements to the Council to give an assurance that it was still in the business. SAA had been doing that, but Mango had not done so since the BRP began. Prof Lamola stated that from the board’s position and its understanding of how the process operated, that was a major risk. The sadness of it was that the BPR had announced on 8 August 2021 that he had a shortlisted bidder who had to submit the financial instruments and letters of confidence in August. The SAA board believed that it was because of the routes that that particular bidder was no longer interested. Such transactions meant dealing with bankers and banks and their credit committees and they did not take things at face value. So, in summary, the board’s assessment of the risk rate of the Air Licensing Council injunction against Mango was more severe than BRP had determined. Although the BRP believed that he would be able to find a way around it, it was going to be a real struggle. SAA was currently dealing with the same issues with the licensing council and so it was aware of how difficult the matter was.

Adv Makobe stated that the majority of the R100 million had been spent on unpaid salaries but he would send a detailed table showing how the funds had been spent, as requested by Ms Tshabalala.

Closing Remarks
The Chairperson thanked the Interim Chairperson of SAA and the Department of Public Enterprises. The minutes would be presented at the following session.
                                                       
The meeting was adjourned.

Download as PDF

You can download this page as a PDF using your browser's print functionality. Click on the "Print" button below and select the "PDF" option under destinations/printers.

See detailed instructions for your browser here.

Share this page: