Mango Implements Amended Rescue Plan Offering Partial Ticket Refunds While Pursuing Structured Wind Down

Mango’s creditors and its Business Rescue Practitioner (BRP), Sipho Sono, have approved an amended business rescue plan that will see the airline undergo a structured wind-down rather than a liquidation, a move intended to maximise recoveries for creditors. However, the plan proposes a minimal refund of 12,66% to Mango passengers with unflown tickets.

Assets and funding

According to the plan, Mango’s assets include a cash balance of R385,6 million and trademarks registered in the name of Mango, the value of which has not yet been determined.

Creditors will be paid from the balance of funds received from government and the shareholder for the restructuring of Mango, together with proceeds from the sale of an aircraft engine and any additional proceeds from the potential sale of the airline’s trademarks.

Passenger refunds

The unflown ticket liability (UTL) was valued at R169 million at the commencement of business rescue. However, the BRP only received verified claims amounting to approximately R29,5 million, by the deadline of September 1.

“The main reason for the lesser amount is that COVID 19 vouchers amounting to approximately R100 million have not been claimed during the verification process,” said Sono.

As a part of the proposed structured wind down, Mango customers with unflown tickets or vouchers will receive an estimated 12,66 cents in the rand, or 12,66% of their total claim value.

Customers will initially receive 40% of this dividend within 30 days of the adoption of the plan, which took place on November 24, 2025.

The remaining 60%, nett of any taxes that may be due, will be paid within 30 days following the assessment of Mango’s income tax returns and audits for the years 2023 to 2025. According to Sono, this date will be determined by the completion of the assessment and audit by Sars and the AGSA, respectively.

Mango also holds a Passenger Protection Plan guarantee issued by Standard Bank, which formed part of the airline’s compliance requirements for obtaining domestic and international operating licences.

The guarantee was issued in favour of the Air Services Licensing Council (ASLC) and the International Air Services Council (IASC), who are legal beneficiaries and therefore control access to the funds.

The BRP has requested the councils authorise the release of the guarantee funds to Mango’s estate to assist in paying passenger claims. If released, the money would be ring-fenced for affected customers, but the value has not been disclosed in the plan.

The BRP has committed to processing refunds on behalf of the regulator, subject to the councils agreeing to release the funds.

Creditor funds

Mango’s owings to creditors amounts to R2,8 billion, excluding the unflown ticket liability.

As a part of the wind-down, creditors will also receive 40% of their estimated dividends within 30 days from adoption of the amended plan. Thereafter, the balance of the dividends, nett of any taxes that may be due, will be paid within 30 days following the assessment of Mango’s income tax returns and audit for the years 2023 to 2025.

A moratorium imposed on Mango prohibits any legal proceedings, including enforcement action against or in relation to any property belonging to the Mango from being commenced or being proceeded with, for the duration of the business rescue proceedings.

This means that creditors will not be able to take action against Mango for non-payment of debts during the wind down.