Hand Delivered to Head Office of the Trade Unions
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Mezzanine Level | Domestic Departures Terminal | OR Tambo International Airport | 1627
PO Box 1273 | OR Tambo International Airport | 1627
Mango Airlines (SOC) Ltd - Reg No. 2006/018129/30 Directors: Interim Chairman: MMB Zwane, NO Fadugba, MW Ndlovu, EL Van Harte
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Published on the Website Maintained by the Company and Accessible to Affected Persons Hand Delivered to Head Office of the Trade Unions
_______________________________________________________________ 12 August 2021 Attention: All Affected Persons
Mango Airlines SOC Limited NOTICE OF COMMENCEMENT OF BUSINESS RESCUE AND APPOINTMENT OF BUSINESS RESCUE PRACTITIONER FOR MANGO AIRLINES SOC LIMITED Statutory Notification
1 Affected Persons are hereby notified, in accordance with section 129(3)(a) and section 129(4)(b) of the Companies Act 71 of 2008, as amended ("Companies Act"), that the board of Mango Airlines SOC Limited ("Company") –
1.1 passed a resolution on 16 April 2021 ("BR Resolution") to voluntarily commence business rescue proceedings and to place the Company under supervision in terms of Section 129(1) of the Companies Act, and which, as confirmed in the below mentioned Court Order, was filed with the Companies and Intellectual Property Commission ("CIPC") on 28 July 2021. The Company's business rescue proceedings accordingly commenced on 28 July 2021; and
1.2 passed a resolution on 3 August 2021 to appoint Mr Sipho Sono ("Mr Sono") as the Business Rescue Practitioner ("BRP") in terms of section 129(3)(b) of the Companies Act ("BRP Resolution").
2 Throughout the business rescue proceedings of the Company, reference will be made
to the words "Affected Persons". The Affected Persons of the Company are defined in section 128(1) of the Companies Act to include the creditors, the shareholder, the employees, the trade unions representing any employees and any other representatives of the employees, if one or more employee is not represented by a trade union (as defined in section 128(1) of the Companies Act). However, in the context of these proceedings, a reference to "Affected Persons' will also include the regulatory bodies, including the relevant aviation authorities,
3 Although you have received this notice, nothing in this letter shall be construed to be an admission of your status as an Affected Person of the Company, which status will be
2
Mango Airlines (SOC) Ltd - Reg No. 2006/018129/30 Directors: Interim Chairman: MMB Zwane, NO Fadugba, MW Ndlovu, EL Van Harte
determined by the BRP in the course of the business rescue proceedings of the Company.
Legal Proceedings Reported in the Press
4 Although the documents for the commencement of the Company's business rescue were
duly filed with the CIPC on 28 July 2021, the CIPC did not recognise that the documents had been filed and that the Company had commenced business rescue.
5 To deal with this, the Company brought a Counter-Application to Gauteng High Court under case number: 21/35958 (as part of the separate business rescue Court application brought by the three trade unions – the Mango Pilots Association, the South African Cabin Crew Association and the National Metal Workers Union South Africa ("Unions") – in which the Unions also requested that the Company be placed in business rescue).
6 On 10 August 2021, the Court handed down an order ("Order") in which it confirmed, among other things, that the Company had commenced business rescue on 28 July 2021 (on the date on which the documents for the commencement of business were filed with the CIPC).
7 The effective date of the Company's business rescue is 28 July 2021.
8 A copy of the Order is enclosed with this notice. Documents attached to this Notice
9 For the commencement of business rescue proceedings, Form CoR 123.1 (being a Notice of Beginning of Business Rescue), a sworn statement deposed to by William Ndlovu and the documents referred to below, were filed with the CIPC on 28 July 2021.
10 For the appointment of Mr Sono as the BRP Form CoR 123.2 (being a Notice of Appointment of the BRP), among other documents as set out below, was filed with the CIPC on 11 August 2021.
11 In accordance with the requirements of sections 129(3)(a) and 129(4)(b) of the Companies Act, copies of the following documents are enclosed with this notice –
11.1 the Notice to Commence Business Rescue Proceedings (Form CoR 123.1);
11.2 the BR Resolution;
11.3 the Sworn Statement deposed to by William Ndlovu;
11.4 the BRP Resolution;
11.5 the notice of appointment of the BRP (Form CoR123.2); and
11.6 the letter of acceptance of appointment by Mr Sono.
12 All the notices (including this notice) that are published to Affected Persons of the Company will be uploaded to the Company's website
3
Mango Airlines (SOC) Ltd - Reg No. 2006/018129/30 Directors: Interim Chairman: MMB Zwane, NO Fadugba, MW Ndlovu, EL Van Harte
https://www.flymango.com/en/mango-business-rescue) and will be available under a dedicated tab called "Business Rescue".
First Statutory Meetings of Creditors and Employees
13 In terms of section 147(1) and 148(1) of the Companies Act the BRP must convene the first meeting of creditors and the first meeting of employees’ representatives within 10 business days of his appointment.
14 These meetings will be held on or before 18 August 2021. 15 Further details about these meetings, including the agenda, will be provided in a separate
notice to Affected Persons on or before 16 August 2021. General
16 The Company and the Business Rescue Practitioner will continue to keep you apprised of any and all developments in respect of this business rescue.
17 All enquires can be directed to [email protected].
Yours faithfully William Ndlovu Acting Chief Executive Office Mango Airlines SOC Limited
Mezzanine Level | Domestic Departures Terminal | OR Tambo International Airport | 1627
PO Box 1273 | OR Tambo International Airport | 1627
Mango Airlines (SOC) Ltd - Reg No. 2006/018129/30
Directors: Peter Tshisevhe (Chairman) William Ndlovu
WRITTEN RESOLUTION OF THE BOARD OF DIRECTORS
Of
MANGO AIRLINES SOC LIMITED REGISTRATION NUMBER: 2006/018129/30
(Hereinafter referred to as the “Mango / Company”)
MANGO BOARD WRITTEN RESOLUTION
Suspension of operations and business rescue
The Directors acknowledge, by signature hereto, that they have received notice to consider the below resolutions and that they further, by their signature hereto, agree to the passing of the below
resolutions, by way of written resolution.
The board resolved to:
1.Place the business under business rescue in terms of the Companies Act No.71 of 2008 Chapter 6 S129.
Refer Annexure A for assessment.
2. Suspend all operations with immediate effect as a result of no funding having been received by the
Department of Public Enterprises due to legal issues related to the Appropriations Bill
3. Inform the shareholder of the company decision and urge the shareholder to urgently provide its
concurrence
DIRECTOR SIGNATURE DATE
PETER TSHISEVHE
WILLIAM NDLOVU
16 April 2021
16 April 2021
2
Reproduced by Sabinet Online in terms of Government Printer’s Copyright Authority No. 10505 dated 02 February 1998
284 No. 34239 GOVERNMENT GAZETTE. 26 APRIL 2011
Companies and Intellectual Property CommissionRepublic of South Africa
Notice of Beginning of Business Rescue Proceedings
Date:Customer Code: WERKMP
Concerning:'Name and Registration Number of Company)Name:MANGQ AIRLINES SQC LIMITED Registration No.2006/018129/30
The above named company advises that business rescue proceedings have commenced in terms of Chapter 6 of the Companies Act, as a result of:
O The Board of the company having adopted the attached resolution in terms of section 129, on 16 APRIL 2021.
O A Court having made the attached order in terms of section 131, on
In terms of section 132 (l)(a), the company's business rescue proceedings commenced on, being the date on which:
This notice was filed with the commission.
□ The court issued the attached order.
(Only in the case of a company resolution)
In support of this Notice, the company has attached a sworn statement of the relevant facts upon which the resolution was founded by a director representing theBoard.
Name and Title of person signing on behalf of the Company:
WILLIAM NDLOVU
Authorised Signature:
This form is prescribed by the Minister of Trade and Industry in terms of section 223 of the Companies Act, 2008 (Act No. 71 of 2008)
SWORN STATEMENT
I, the undersigned,
WILLIAM NDLOVU
do hereby state as follows -
1 I am currently employed as the Chief Executive Officer and a director of Mango Airlines
Limited (Registration Number: 2006/018129/30) ("Company"), a state owned company
with limited liability which has its registered address and principal place of business at
Mezzanine Level, Domestic Departures Terminal, OR Tambo International Airport,
Kempton Park, 1627. My appointment is yet to be reflected on the website maintained by
the Companies and Intellectual Property Commission ("CIRC").
2 I am duly authorised to depose to this Sworn Statement, setting out the facts relevant to
the grounds on which the board resolution was founded, on behalf of the Company. I was
present at the board meeting of 16 April 2021.
3 This Sworn Statement is made by me on behalf of the Company to support the
commencement of business rescue proceedings ("Business Rescue") in terms of
Section 129 of the Companies Act 71 of 2008 ("Companies Act").
4 With this Sworn Statement, I intend to provide the relevant information that is required in
order to demonstrate that the Company should be placed in Business Rescue.
5 The information contained in this Sworn Statement and the opinions expressed in the
Sworn Statement relate to the following:
5.1 the Board resolution of 16 April 2021 ("the Resolution") and compliance with the
Public Finance Management Act 1 of 1999 ("the PFMA");
5.2 the Company's financial distress; and
5.3 the ability of the Company to be rescued, by either continuing as a going concern
on a solvent basis, or, if that is not possible, pay a higher dividend to its creditors
than that which would become payable to creditors if the Company were to be
liquidated.
INTRODUCTION
6 The Company is a state owned company subject to the PFMA, and is a subsidiary of
South African Airways SOC Limited ("SAA"). The Company commenced business in
2006 as a low-cost domestic aviation company, and employs over 700 employees. It
facilitates, inter alia, business and tourism in South Africa. Prior to 1 May 2021, when the
Company suspended its flying operations, it operated 5 aircrafts. Presently, the Company
only has 2 aircrafts in its fleet.
7 The Company has a public interest score of 4101, calculated as follows:
7.1 700 points, being the number of points equal to the average number of employees
of the Company during the financial year;
7.2 2500 points, calculated on the basis of one point for every R1 million (or portion
thereof) in third party liability of the Company, at the financial year end;
7.3 900 points, calculated on the basis of one point for every R1 million (or portion
thereof) in turnover during this financial year; and
7.4 1 point, for its sole shareholder, namely SAA.
8 As a state owned company, the Company should be placed under the supervision of a
senior Business Rescue practitioner in terms of Companies Act Regulation 127(5). The
Company is considering the appointment of Mr Sipho Sono for this purpose in terms of
section 129(3)(b) of the Companies Act.
RESOLUTION AND PFMA
9 The Company's board of directors adopted the Resolution, to voluntarily commence
Business Rescue proceedings, on 16 April 2021 in terms of section 129 of the Companies
Act. The Resolution is attached hereto and marked as Annexure "SA1".
10 Although the Resolution was validly adopted, it could not be given effect to, through filing
of the Resolution with the CIRC, until the Company had complied with the relevant
provisions of the PFMA.
11 Section 54(2) of the PFMA provides that -
"Before a public entity concludes any of the following transactions, the accounting authority for the public entity must promptly and in writing inform the relevant treasury of the transaction and submit relevant particulars of the transaction to its executive authority for approval of the transaction:
(a) establishment or participation in the establishment of a company;
(b) participation in a significant partnership, trust, unincorporated joint venture or similar arrangement;
(c) acquisition or disposal of a significant shareholding in a company;
(d) acquisition or disposal of a significant asset;
(e) commencement or cessation of a significant business activity; and
(f) a significant change in the nature or extent of its interest in a significant partnership, trust, unincorporated joint venture or similar arrangement."
12 For purposes of Section 54(2) the term "significant" is not defined in the PFMA. However
the Treasury Regulation 28.3.1 provides that the board of directors of a public entity must
develop and agree a framework of acceptable levels of "significance" and "materiality"
with the Minister of Finance ("Significant Transactions"). The Significance and Materiality
Framework of the Company ("SMF") contemplates that the acquisition or disposal of a
significant shareholding in a company includes the voluntary winding up, liquidation,
deregistration of any company or Business Rescue. In light of this, in terms of the SMF,
shareholder approval in terms of section 54 of the PFMA is required to place the
Company in Business Rescue.
13 Furthermore, it is anticipated that the placement of the Company in Business Rescue will
require funding for the Post Commencement Finance ("PCF"). Therefore, shareholder
support of the Business Rescue process will be necessary in order to secure PCF funding
and thus ensure that the Company is rescued as contemplated in Chapter 6 of the
Companies Act.
14 In terms of the PFMA, the Company is a Schedule 2 entity by virtue of it being a subsidiary
of SAA, a major public entity listed under Schedule 2 of the PFMA.
15 The PFMA contemplates that if a public entity has a board or other controlling body, that
board or controlling body is the accounting authority for that entity. In light of this, the
board of directors of the Company is the accounting authority for the Company.
16 The current Minister of Public Enterprises, Minister Pravin Gordhan ("Minister
Gordhan"), is the current shareholder representative of the Government of South Africa
for SAA and its subsidiaries, and accordingly their Executive Authority.
17 On 16 April 2021, the board of directors of the Company adopted the Resolution to place
the Company in Business Rescue in terms of section 129 of the Companies Act on the
basis that it informs the shareholder of the Company of its decision and urge the
shareholder of the Company to urgently provide its concurrence.
18 SAA, being the sole shareholder of the Company, was then informed of the Resolution to
place the Company in Business Rescue. Pursuant to a resolution of the board of directors
of SAA, adopted on 19 April 2021 ("SAA Board Resolution"), the board of directors of
SAA resolved to recommend that the Company be placed in Business Rescue in terms
of section 129 of the Companies Act and also inform the shareholder of SAA of such
recommendation and request that it urgently provides its concurrence. A copy of the
extract of the SAA Board Resolution, as certified by the Company Secretary, is attached
hereto as Annexure "SA2".
19 Following the adoption of the SAA Board Resolution, on 30 April 2021, the Chairperson
of SAA then, MR MG Qhena, wrote to Minister Gordhan as the executive authority of SAA
and shareholder representative for SAA and Minister Tito Mboweni, the Minister of
Finance to inform them and formally request Minister Gordhan's approval and
concurrence to place the Company in Business Rescue in terms of Chapter 6 of the
Companies Act. A copy of the letter to Minister Gordhan is attached hereto as Annexure
"SAS".
20 On 7 May 2021 Minister Gordhan responded to the Chairperson letter dated 30 April 2021
and indicated that there were financial and legal issues that needed to be finalised before
a final decision could be made regarding placing the Company in Business Rescue and
that the final decision of the executive authority and shareholder representative of SAA
would be communicated the following week.
aM
21 On 7 June 2021 Minister Gordhan wrote to the Chairperson of SAA and requested an assessment of the future sustainability (particularly the financial sustainability) of the Company.
22 On 1 July 2021 the current Chairperson of SAA, Mr John Lamola sent a letter to Mr
Gordhan together with the Company Sustainability Assessment Report and which report recommended that the Company be placed in Business Rescue.
23 On 22 July 2021 Minister Pravin Gordhan addressed a letter to the Chairperson of SAA confirming its support of the decision of the board of directors of the Company to place
the Company in Business Rescue in line with the provisions of the Companies Act. A
copy of the said letter is attached hereto as Annexure "SA4".
24 Accordingly the Company and SAA received approval and concurrence from Minister
Gordhan, the Executive Authority of the Company and SAA, to place the Company in
Business Rescue on 22 July 2021.
25 Section 5 of the Companies Act requires that the PFMA be applied concurrently with the
Companies Act to the extent possible. However, insofar as the provisions of the Companies Act conflict with the provisions of the PFMA, to the extent that it is impossible
to comply with the one without contravening the other, the provisions of the PFMA will
prevail.
FINANCIAL DISTRESS
26 The Company has been significantly affected by the unprecedented economic effects of the COVID-19 pandemic ("Pandemic"), the travel bans imposed by the President of
South Africa ("President") in order to flatten the curve of infections of COVID-19 ("the
Virus"), and the nationwide lock-down ordered by the President on Monday, 23 March 2020 ("lock-down"), in terms of the Disaster Management Act 57 of 2002 and the
regulations promulgated thereunder.
27 The Company was forced to suspend all flights operated by it for almost 3 months, from
26 March 2020 due to the lock-down, until 15 June 2020, when essential business travel
between Johannesburg, Cape Town and Durban then became possible. The
Company generated no revenue during this period.
28 South Africa has continued to be under varying levels of lock-down over the course of
more than 16 months. The Pandemic has had unprecedented adverse financial consequences for the tourism industry, and the Company was unfortunately not spared
as passengers could at first not fly at all, and now, whilst domestic flights are allowed, choose to fly only in exceptional circumstances in order to avoid exposure to the COVID-
19 virus. In addition, limitations on international travel has also had a significant impact on the Company's number of passengers.
29 Per illustration, prior to the Pandemic, the Company's operating profit for the year-ended
2019 was R977,508,604.00. However, since the onset of the Pandemic, the Company's
operating profit declined for the year ending 2020 to R462,820,562.00, and declined
further for the year ending 2021 to an operating /oss of R157,142,929.00.
30 The Company's financial issues were exacerbated by the inability of its shareholder,
namely SAA who only exited its Business Rescue proceedings on 30 April 2021, to fund
the Company.
31 Consequently the Company's board of directors adopted the Resolution on 16 April 2021,
and reduced its flight schedule from 1 May 2021 and operated only 2 aircrafts, whilst
compliance with the PFMA was awaited. It has generated limited revenue during this time, whilst it continued to incur certain fixed operational costs, such rentals on leased
aircraft.
32 The Company is therefore financially distressed, within the meaning of Section 128 of
Chapter 6 of the Companies Act, in that, inter alia -
32.1 the Company does not have sufficient cash reserves to pay its current obligations,
and it is estimated that the Company under current market conditions, requires an
amount of R800 million to fund its working capital requirements including, inter alia,
employees' salaries, repayment of loans and rental for leased aircraft. The Company is not able to raise such capital on the strength of its balance sheet; and
32.2 it therefore appears to be reasonably unlikely that the Company will be able to pay all of its debts as they fall due and payable within the ensuing six months (in terms
of section 128(1 )(f)(i)).
(?.rA
33 The Company is currently embroiled in the following legal proceedings, against:
33.1 Aergen Aircraft Four Limited and Another in the Gauteng Local Division of the High
Court of South Africa ("GLD") under case number 2021/21027 that was brought on
28 April 2021 (approximately 12 days after the Resolution was adopted), in which
the Liquidation of the Company is being sought; and
33.2 Mango Pilots Association and two others in the GLD under case number
2021/35958 that was brought on 26 July 2021, in which an order is sought to place
the Company in business rescue, notwithstanding the fact that the Applicants in
these proceedings had been advised that PFMA approval had been received for the
filing of the Resolution.
REASONABLE PROSPECT OF RESCUE
34 Notwithstanding the above, the directors of the Company believe that there is a
reasonable prospect of rescuing the business of the Company, if the Company
commences Business Rescue immediately and receives post-commencement finance. If
the Company is placed under the supervision of a senior Business Rescue practitioner,
initiatives under Chapter 6 of the Companies Act can be taken, such as:
34.1 imposing an immediate temporary moratorium on all payments to creditors in terms
of section 133 of the Act;
34.2 continuous engagement with stakeholders, including the Government, to retain
value in the Company and its assets;
34.3 restructuring the debt of the Company with its creditors;
34.4 restructuring the cost-base and operations of the Company;
34.5 engaging in discussions with various parties regarding investment into and/or the
provision of post commencement finance to the Company;
34.6 considering the possible suspension or cancellation of the Company's obligations in
terms of section 136(2) of the Act;
34.7 restructuring the Company's labour costs through a retrenchment process in terms of an approved Business Rescue plan; and
34.8 negotiating the sale of the Company's business or part thereof as a going concern, or of certain of its assets to potential purchasers, at a value higher than in a
liquidation and where the majority of employees of the company would most likely
retain their jobs.
35 Accordingly, the Company through its board of directors, maintains that the company is financially distressed, but that there remains a reasonable prospect of rescuing thecompany and, accordingly, that the Company needs to be placed in Business Rescue.
WILLIAM NDLOVU
I certify that this affidavit was signed and sworn to before me at on this the ZSS^day of JULY 2021 by the deponent who acknowledged that he knows and understands the contents of this affidavit, has no objection to taking this oath, considers this oath to be binding on his conscience and uttered the following words: 'I swear that the contents of this affidavit are both true and correct, so help me God.'
ISStdNER OF OATHSC
Name:
Address:
Capacity
ONTHATILE LESHILO Commissioner Of Oaths Ex Officio
Registered Attorney R.S.A DM Kisch Inc
Inanda Greens Business Park54 W1ERDA RD WEST. WIERDA VALLEY. SANDTON
RO. BOX 781218. SANDTON. 2146
ANNEXURE ”SA1<&•
<octng©,fly ma ngo.com
Mezzanine Level | Domestic Departures Terminal | OR Tambo International Airport | 1627 PO Box 1273 | OR Tambo International Airport | 1627
WRITTEN RESOLUTION OF THE BOARD OF DIRECTORS
Of
MANGO AIRLINES SOC LIMITED REGISTRATION NUMBER: 2006/018129/30
(Hereinafter referred to as the “Mango / Company”)
MANGO BOARD WRITTEN RESOLUTION
( Suspension of operations and business rescue
The Directors acknowledge, by signature hereto, that they have received notice to consider the below resolutions and that they further, by their signature hereto, agree to the passing of the below
resolutions, by way of written resolution.
The board resolved to:
1 .Place the business under business rescue in terms of the Companies Act No.71 of 2008 Chapter 6 S129.
Refer Annexure A for assessment.
2. Suspend all operations with immediate effect as a result of no funding having been received by the
Department of Public Enterprises due to legal issues related to the Appropriations Bill
3. Inform the shareholder of the company decision and urge the shareholder to urgently provide its
concurrence
DIRECTOR SIGNATURE DATE
PETER TSHISEVHE16 April 2021
WILLIAM NDLOVU16 April 2021
Mango Airlines (SOC) Ltd - Reg No. 2006/018129/30 Directors: Peter Tshisevhe (Chairman) William Ndlovu
ANNEXURE "SA2
South African AirwaysFLYSAA.COM
South African AirwaysCompany SecretarySuite 2,6lh FloorAirways Park1627
Private Bag X13ORT International Airport1627
Tel: 27 11 978-6553Email: companvsecretaryjS)flvsaa.com
WRITTEN RESOLUTION NO. 2021/B08 OF THE BOARD OF DIRECTORS OF SOUTH AFRICAN
AIRWAYS SOC LTD: MANGO AIRLINES SOC LIMITED SUSPENSION OF OPERATIONS AND
BUSINESS RESCUE CONSIDERATION
Issued in pursuance of Section 74 of the Companies Act (Act No. 71 of 2008) and clause 13.11.9 of
the SAA Memorandum of Incorporation
The Board by Round Robin 2021/B08 as of 19 April 2021, ratified on 29 June 2021 RESOLVED to
approve that:
1. Mango Airlines SOC Limited be placed under business rescue as contemplated in the
Companies Act No.71 of 2008 Chapter 6 S129;
2. All operations be suspended with immediate effect as a result of no funding having been
received by the Department of Public Enterprises due to legal issues related to the
Appropriations Bill; and
3. The shareholder of the company be informed of the decision and urge the shareholder to
urgently provide its concurrence.
Ruth Kibuuka
Company Secretary
Date: 27 July 2021
ANNEXURE "SA3
South African Aikways
Minister Pravin Gordhan, MPMinister of Public Enterprises Department of Public Enterprises 80 Hamilton Street, ArcadiaPretoria0028E-mail: [email protected]
South African Airways Office of the Chairperson Airways Park1 Jones Road Kempton Park
Private Bag X13OR TAMBO INTERNATIONAL 1627
Tel'. 2711 978-2520Email: [email protected]
CC: Minister Tito Mboweni, MP - Minister of Finance
Email: [email protected]
CC: Mr Kgathatso Tlhakudi - Director GeneralE-mail: Kqathatso.Tlhakudi(a>dpe.qov.za
CC: The Joint Business Rescue PractitionersEmail: [email protected] [email protected]
Honourable Minister,
FORMAL REQUEST FOR APPROVAL AND/OR CONCURRENCE TO PLACE MANGO AIRLINES SOC LIMITED (“MANGO AIRLINES’) UNDER BUSINESS RESCUE IN TERMS OF CHAPTER 6 OF THE COMPANIES ACT (ACT NO. 71 OF 2008)
The above matter bears reference.
1. Reference is made to our letters dated 15 February, 17 March and 14 April 2021 detailing the dire financial position of Mango Airlines as well as recommending placing the company under business rescue as soon as possible. For ease of reference, these are attached as Annexures “A”, “B" and “C” respectively.
2. Reference is further made to the emergency meeting held on 27 April 2021 between the Interim Board of SAA , the Honourable Minister and senior management of the Department of Public Enterprises, wherein the dire financial position of Mango Airlines was discussed including the
Diractors
MG Qhena* (Inferim Chairperson), JB Crawford’, NO Fadugba”' EL Van Harts’. MP Tshisevhs, ’ MMB Zwane’
’Interim Non-Executlve Director’ British Citizen
Company Secretary - RN KitxHjka
South African Airways SOC Ltd Reg. No. 1987/022444/30A STAR ALLIANCE MEMBER Z>
position of the Interim Board that Mango Airlines must be placed under business rescue with immediate effect. Various options available to the Interim SAA Board were shared by the DPE and those included liquidation, wound down, business rescue process and ceasing of operations. The department favoured wounding down and minimising any serious negative impact on sectors of society. The Board needed to reflect on this and also form a creditors’ committee to explore the extent of the debt owed by Mango Airlines and the possibility of getting the said debt compromised. It was stated that any impact of this would be limited and was unlikely to change the potential demise of the company.
3. The Mango Airlines Board of Directors and the Interim Board of SAA resolved to put Mango Airlines under business rescue in the absence of immediate funds being available, on 16 and 19 April 2021 respectively. The Interim Board of SAA reflected on the advantages and disadvantages of placing the company in business rescue in terms of Chapter 6 of the Companies Act (Act No.71 of 2008) and the subsequent submission made to the Honourable Minister. In the said submission, the Directors outlined the dire situation that Mango Airlines finds itself in and the risks associated with continued operations. In considering the submission by the Directors of Mango Airlines, the Interim Board of SAA deliberated on the facts presented and considered various factors which include, inter alia, the following:
a. Mango’s dire financial position and its inability to continue with operations;b. The undertakings made by the Ministry and the Department of Public Enterprises with regard
to making funding available, which to date has not materialised;c. The inability of SAA’s Business Rescue Practitioners to advance funding to Mango to enable
the company to fulfil its legal obligations to its stakeholders;d. The legal and commercial consequences of continued operations as well as the socio
economic impact of business rescue;e. The implications and consequences of placing Mango Airlines in business rescue; andf. The legal duty of Directors and the associated risk of reckless trading.
4. The Interim Board applied its mind to the matter and came to the conclusion that, it will be in the best interest of Mango Airlines and all its stakeholders, to place the company in business rescue. Consequently, the Board took a resolution to place Mango under business rescue. The signed resolutions are attached as Annexure D. These resolutions were submitted to the Honourable Minister on 19 April 2021 for consideration.
5. This letter should therefore be read within the context of the above-mentioned letters and the various discussions held with the Honourable Minister and the Director General of the Department of Public Enterprises, pertaining to the financial distress bedevilling SAA’s subsidiaries including Mango Airlines.
6. The Board reflected in its meeting of 29 April 2021 on the options shared by the Ministry, creditors of Mango Airlines that are sitting at R2.4 billion, the tremendous pressure that is exerted by creditors, low cash position within the airline and low prospect of generating positive cash positions going forward, especially in this environment of immense uncertainty.
7. The Board is unwavering in its belief that it is in the best interest of Mango Airlines and all its stakeholders, that it be placed under business rescue, tn addition, due to the lack of funding, Mango Airlines will temporarily be suspending all operations until further notice.
8. In terms of the SME, the Shareholder’s approval is required to place Mango Airlines under business rescue. It is against this background that this letter is written wherein we formally and/or
officially request the Honourable Minister as the Shareholder Representative, to approve the placing of Mango Airlines under business rescue.
9. Should the Honourable Minister not support the request to place Mango Airlines under business rescue, the Interim Board of SAA and the Directors of Mango Airlines, will have no option but to explore all available advice to relieve themselves from any legal consequences associated with the continued operations of Mango Airlines under the current financial circumstances.
10. The Honourable Minister is also hereby informed that as of this morning, Mango Airlines has received liquidation papers by Aergen Four Limited and Aergen Five Limited. Should this application be successful, the company will not be able to proceed with business rescue proceedings as contemplated.
11. The Honourable Minister is implored to approve the placing of the company under business rescue in order to avoid any legal consequences that may emanate from any contrary decision taken by the shareholder in this regard.
12. The other alternative is to immediately change the shareholding of Mango Airlines to DPE.
We trust the Honourable Minister will find this to be in order. Should there be a need for further information and/or clarify in this regard, we are available to respond to same.
hairperson: SAA Board of DirectorsMr. MGInteriDate: 30 April 2021
Yours sincerely,
ANNEXURE "SA4
MINISTRY PUBLIC ENTERPRISES
REPUBLIC OF SOUTH AFRICA
Private Bag Xi 5, Hatfield, 0028; 80 Hamilton Street; Arcadia Tel: 012 431 1118/1150 Fax; 012 431 1039 Private Bag X9079, Cape Town, 8000 Fax: 021 465 2381
Mr Malesela John LamolaInterim ChairpersonSouth African Airways SOC LimitedAirways Park1 Jones RoadKempton Park1627
Dear Mr Lamola
MANGO AIRLINE (MANGO) SUSTAINABILITY ASSESSMENT
The letter dated 1 July 2021 and Mango Sustainability Assessment Report, refers.
I note that the Mango Sustainability Assessment Report recommends that Mango be placed under business rescue.
I hereby note and support the Board’s decision to place Mango under business rescue in line with the provisions of the Companies Act 71 of 2008.
I trust that you will find the above in order.
Regards,
P J GORDHAN, MPMINISTERDATE: 22-07-2021
CONFIDENTIAL
NB/N802082021/SOUT0004.36Business Rescue Resolution (7SH 9338 1) - 2 August 2021/#7920465v1
RESOLUTIONS PASSED BY THE WRITTEN CONSENT OF THE BOARD OF
DIRECTORS OF MANGO AIRLINES SOC LIMITED (2006/018129/30) ("COMPANY"),
This document has been submitted to all the directors of the Company and constitutes notice
to each director of the matters to be decided by the passing of the resolution/s set out below.
We, the directors of the Company whose names appear below and who have signed this
document (or any counterpart of it), adopt the resolutions below by written consent in
accordance with section 74 of the Companies Act No 71 of 2008, as amended ("Companies
Act") and the Company’s memorandum of incorporation, on the basis that such resolutions
will have the same effect as if they had been approved by voting at a meeting of the board of
directors of the Company ("Board"), duly convened, constituted and held.
No disclosures have been made in accordance with section 75 of the Companies Act and
each director, by his or her signature hereto, confirms that he or she (i) does not have any
personal financial interest, as contemplated in section 75 of the Companies Act, in any matter contemplated in the resolutions below; and (ii) is not aware that any related person
(as such term is defined in section 75(1 )(b) of the Companies Act) to such director has any
such personal financial interest.
1 IT IS RECORDED THAT-
1.1 the Board adopted a resolution on 16 April 2021 ("Business Rescue
Resolution") to place the Company in business rescue proceedings voluntarily in
terms of section 129(1) of the Companies Act, 2008 (the "Act");
1.2 the Business Rescue Resolution was subject to a condition that approvals in
terms of the Public Finance Management Act ("PFMA") be obtained;
1.3 the relevant PFMA approvals were obtained on 22 July 2021 and thereafter the
Company filed the Business Rescue Resolution (and the ancillary documents)
with the Companies and Intellectual Property Commission of South Africa
("CIPC") on 28 July 2021; and
Business Rescue Resolution (791 S338.1) - 2 August 2021/#7920465v1C2082021
1,4 in terms of section 129(3)(b) of the Companies Act within five days after the
Company has adopted and filed the Business Rescue Resolution, the Company is
required to appoint a business rescue practitioner,
2 IT IS RESOLVED THAT-
2.1 Mr Sipho Sono (identity number 660925 5795 082), be and is hereby appointed
as the business rescue practitioner of the Company in terms of section 129(3)(b)
of the Act; and
2.2 any of the directors of the Company, in their capacity as directors of the Company
be and are hereby authorised on behalf of the Company to do all things
necessary, or to procure the doing of all things necessary, and to sign any and all
documents, or procure the signing of any and all documents, as is necessary to
give effect to the above resolutions.
.:Name: Moretlana Martha Bembe Zwane
Capacity: Director
Date: 2021
Name: Nicholas Olawande Fadugba
Capacity: Director
Date:
Name: Moshabe William Ndlovu
Capacity: Director
Date’ 05 August 2021
2
Business Rescue Resolution (7919338.1) - 2 August 202VW92046Svt3/8/2021
Name: Nicholas Olawande Fadugba
Capacity: Director
Date:
Name: Moshabe William Ndlovu
Capacity: Director
Date:
Name: Edna Lorraine Van Harte
Capacity: Director
Date: OJ August 202)
7
NB/NB02082021/SOUT0004,36Business Rescue Resolution (7919338,1) - 2 August 2021/#7920465v1
RESOLUTIONS PASSED BY THE WRITTEN CONSENT OF THE BOARD OF
DIRECTORS OF MANGO AIRLINES SOC LIMITED (2006/018129/30) ("COMPANY"),
This document has been submitted to all the directors of the Company and constitutes notice to each director of the matters to be decided by the passing of the resolution/s set out below.
We. the directors of the Company whose names appear below and who have signed this
document (or any counterpart of it), adopt the resolutions below by written consent in
accordance with section 74 of the Companies Act No 71 of 2008, as amended ("Companies Act") and the Company's memorandum of incorporation, on the basis that such resolutions
will have the same effect as if they had been approved by voting at a meeting of the board of directors of the Company ("Board"), duly convened, constituted and held.
No disclosures have been made in accordance with section 75 of the Companies Act and each director, by his or her signature hereto, confirms that he or she (i) does not have any
personal financial interest, as contemplated in section 75 of the Companies Act, in any matter contemplated in the resolutions below; and (ii) is not aware that any related person
(as such term is defined in section 75(1 )(b) of the Companies Act) to such director has any
such personal financial interest.
1 IT IS RECORDED THAT -
1.1 the Board adopted a resolution on 16 April 2021 ("Business Rescue
Resolution") to place the Company in business rescue proceedings voluntarily in
terms of section 129(1) of the Companies Act, 2008 (the "Act");
1.2 the Business Rescue Resolution was subject to a condition that approvals in
terms of the Public Finance Management Act ("PFMA") be obtained;
1.3 the relevant PFMA approvals were obtained on 22 July 2021 and thereafter the
Company filed the Business Rescue Resolution (and the ancillary documents) with the Companies and Intellectual Property Commission of South Africa
("CIPC") on 28 July 2021; and
Business Rescue Resolution (7918338.1) - 2 August 2021/*7920465vi 02082021
1.4 in terms of section 129(3)(b) of the Companies Act within five days after the Company has adopted and filed the Business Rescue Resolution, the Company is required to appoint a business rescue practitioner.
2 IT IS RESOLVED THAT -
2.1 Mr Sipho Sono (identity number 660925 5795 082), be and is hereby appointed
as the business rescue practitioner of the Company in terms of section 129(3)(b)
of the Act; and
2.2 any of the directors of the Company, in their capacity as directors of the Company
be and are hereby authorised on behalf of the Company to do all things necessary, or to procure the doing of all things necessary, and to sign any and all
documents, or procure the signing of any and all documents, as is necessary to
give effect to the above resolutions.
Name: Bembe ZwaneCapacity: Director
Date:
Name: Nicholas Olawande Fadugba
Capacity: Director
Date: flugust 2021
Name: Moshabe William Ndlovu
Capacity: Director
Date:
2
Reproduced by Sabinet Online in terms of Government Printer's Copyright Authority No. 10505 dated 02 February 1998
STAATSKOERANT, 26 APRIL 2011 No. 34239 285
Companies and Intellectual Property Commission
Republic of South Africa
Notice of Appointment of Business Rescue Practitioner
Date: I I Customer Code: WERKMP
Concerning:'Name and Registration Number of Company)Name: MANGO AIRLINES SOC LIMITED Registration No.:2006/018129/30
The above named company commenced business rescue proceedings on
The following person has been appointed as the business rescue practitioner:
EXJ By the company, in terms of section 129 (3)(b).
EZZ] By the court, in terms of section 131 (5).
Name and Title of person signing on behalf of the Company:
WILLIAM NDLOVU
Authorised Signature:
This form is prescribed by the Minister of Trade and Industry in terms of section 223 of the Companies Act, 2008 (Act No. 71 of 2008)
Birchwood Court West Wing
43 Montrose Street Vorna Valley, Midrand, 1685
PO Box 169 Lonehill, 2062
Tel: +27 (0) 10 023 2077 Fax: +27 (0) 86 639 8897
OPIS Advisory (Proprietary) Limited www.opisadvisory.co.za Registration number: 2007/012055/07 • Director: SE Sono
Delivered by Email Mango Airlines SOC Limited Board of Directors Attention: William Ndlovu Email: [email protected] 27 July 2021 APPOINTMENT OF A BUSINESS RESCUE PRACTITIONER FOR MANGO AIRLINES SOC LIMITED (REGISTRATION NUMBER 2006/018129/30) 1. I am an adult male employed as such by Opis Advisory (Pty) Ltd in my capacity as Director. 2. In a resolution dated 16 April 2021, the board of directors of Mango Airlines SOC Limited
(registration number 2006/018129/30) (“Company”) passed a resolution in terms of which they resolved to commence voluntarily business rescue proceedings in respect of the Company and place the Company under supervision in terms of Section 129(1) of the Companies Act 71 of 2008, as amended (“Act”).
3. I have been approached by the board of the Company who have advised that they intend in
due course to nominate me as the business rescue practitioner of the Company. 4. I hereby accept the nomination for my appointment as the business rescue practitioner of
the Company. 5. I submit that I am qualified to be appointed as a business rescue practitioner as provided for
in section 138(1)(a) of the Act for the following reasons –
a. I am a member of good standing of a legal, accounting or business management profession accredited or to be accredited by the Commission as I am a member of the South African Institute of Chartered Accountants (SAICA);
b. I am not subject to an order of probation in terms of section 138(1)(c) of the Act;
c. I would not be disqualified from acting as a director of the Company in terms of
section 138(1)(d) of the Act;
d. I do not have any relationship with the Company that would lead a reasonable and informed third party to conclude that my integrity, impartiality or objectivity is compromised by any such relationship as envisaged by section 138(1)(e); and
e. I am not related to any person who has a relationship envisaged in section 138(1)(f)
of the Act. 6. I also confirm that I have the capacity to take the appointment as the business rescue
practitioner of the Company. 7. Please do not hesitate to communicate with me should you require any further information
or require me to provide you with any further documentation to support my appointment. Yours faithfully Sipho Sono