JUST IN: Mango to be temporarily mothballed due to lack of funds
Low-cost airline Mango is set stop operating for a few months, according to internal communication seen by Fin24.
The document states that the executives and board of Mango, as well as the interim board of its parent company South African Airways (SAA), decided on this step after having had to fend off creditors for the past six months and not being able to stall them any longer.
SAA's shareholder, the Department of Public Enterprises (DPE), has been trying to get R2.7 billion of the R10.5 billion allocated in the mini-budget in October last year to go to SAA's subsidiaries Mango, SAA Technical and AirChefs. Treasury requires Parliament to make a special allocation in this regard before the R2.7 billion can flow to subsidiaries.
According to the document, the DPE has been asked to consider putting Mango in business rescue, just like SAA.
It appears that salaries of Mango employees will still be paid this month. It is unclear what would happen next month.
A reliable source told Fin24 that the temporary suspension of operations will likely start from 1 May.
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