Business rescue - South Africa's Mango Airlines to embrace Restructuring under Bankruptcy Protection .

Mango Airlines that is a subsidiary of South African Airways (SAA) becomes the fourth Airline to enter a local form of bankruptcy protection known as business rescue since 2019, eNCA television sources revealed on Monday.

South Africa’s Mango Airlines will enter a local form of bankruptcy protection, according to the interim chief executive Thomas Kgokolo of South African Airways.

SAA, which itself exited business rescue in April, and Mango are among a handful of South African companies that have relied on government bailouts since before the COVID-19 pandemic, placing the national budget under additional strain.

• Mango employees were seeking to force the low-cost carrier into the court-supervised process, known as business rescue.

There’s agreement between shareholders and the board on the matter, and Mango is consulting with labor groups, SAA interim Chief Executive Officer Thomas Kgokolo told eNCA television on Monday.

"What we can say is that the board and shareholders have agreed that Mango will go into business rescue," Kgokolo told eNCA.

Earlier in the June, South African Government had to sell a majority stake in SAA to private equity owners, after it emerged from bankruptcy protection. Now is the turn of Mango that was briefly grounded in the month of April in a dispute over unpaid airport fees. Needless to say, like any other Global airline, both Mango and SAA have been hit hard by the coronavirus crisis.

The South African Cabin Crew Association, The Mango Pilots Association and the National Union of Metalworkers South Africa said the process was instigated after they filed an application on Monday to place Mango Airlines under business rescue.

An administrator is appointed to supervise a financially distressed company. Debt claims are frozen as the company works on a restructuring plan.

• The unions say airline employees have been working without pay since the end of May, and the unit faces a liquidation application brought forward by one of its aircraft suppliers.

The Airline workers say, about 157 million rand ($10.6 million) is 'due' to them. However, the South African government estimates 819 million ($182.3 million) rand for Mango’s bankruptcy protection, SAA and the Department of Public Enterprises have stipulated that a restructuring plan be put in place before money was paid out.

750 jobs are at risk and the unions said they acted ahead of an Aug. 3 liquidation hearing that would jeopardize the possibility of a turnaround. Reportedly, Mango’s fleet shrunk to three in April from a fleet of 14 before the pandemic.

Employees and Unions still feel that mango Can survive and turn around from current losses as it's market is responsive with around 85% load factor