South African carrier Mango Airlines faces closure after sole investor withdraws

Grounded South African low-cost carrier Mango Airlines is heading towards a final winding down after an investor, who had been waiting for legal and regulatory obstacles to be withdrawn, pulled out of the purchase process. As reported by the South African publication Business Tech, following the publication of a circular by the South African Business Rescue Practitioners (BRP), the group confirmed that the investor, which had previously been identified as an investment company trading as Ubuntu Air, no longer wanted to proceed with the process.

Mango Airlines is a wholly-owned budget subsidiary of flag carrier South African Airways that was primarily set up in October 2006 to compete against local low-cost rivals Comair and FlySafair on routes from Johannesburg OR Tambo International Airport (JNB) on the ‘golden triangle’ routes to Durban and Cape Town, as well as other domestic and cross-border destinations. At the height of its operations, the carrier operated a fleet of 16 Boeing 737-800s.

However, having faced stiff competition as well as a financial storm created by the pandemic, Mango effectively ran out of operating cash in July 2021 and was subsequently placed in voluntary business rescue in the same month. BRP was appointed in August of that same year to take control of the carrier’s remaining assets and seek a suitable buyer for the business. Since then, that process has been severely hamstrung and has been frustrated by complicated dealings with the government, several outstanding legal claims against Mango from its creditors, and uncertainty around future funding, making it increasingly difficult to find an investor willing to take the company on.

Wandering views / ShutterstockAs South African Airways (SAA) was the only owner of Mango at the time the BRP was appointed, it had been initially hoped that the carrier would bail out its smaller subsidiary. However, beset with its own financial woes for years, SAA was unable to provide further financial support to either the airline itself or the state to help Mango out. Mango’s business rescue, therefore, relied on the airline finding financing from a third-party investor.

“Regrettably, on July 31, 2025, the Investor [Ubuntu Air] reverted that it had second thoughts about the transaction and would not be proceeding,” the BRP said. “Part of the reason was that the delays have made scheduling of a resumption of operations unrealistic, and the commitment of the other funding partner could not be secured.”

Under the business rescue plan, Ubuntu Air would have acquired the remaining shares owned by South African Airways (SAA), making Mango a privately-owned airline. It had been proposed that under the takeover scheme, it would have then recapitalized the business and injected enough capital to bring the airline back into full operational status.

Rob Atherton / ShutterstockPreconditions applied

One of the preconditions imposed by Ubuntu Air for the transaction to proceed was that the creditors of Mango would have to waive their rights to a significant proportion of the debts owed by Mango, accept a non-guaranteed ‘top-up’ after the sale, and then cede all their rights to claim later. This aspect was challenged in court, and, in July 2025, the rescue plan was halted once more, forcing Ubuntu Air to walk away.

With any realistic chance of Mangio being saved now largely over, the BRP has stated that the best option it sees left for what remains of Mango is a structured winding-down process to be carried out rather than immediately liquidating the company. A winding-down process is still part of a business rescue process, which is not contingent simply on whether a business goes back into operation or not.

Thiago B Trevisan / Shutterstock“The projected payment to concurrent creditors in a business rescue scenario is substantially higher than in a liquidation scenario,” the BRP said. “This is primarily because in the liquidation scenario, [the South African Government] will, as a statutory preferent creditor, enjoy priority over concurrent creditors, resulting in minimal recoveries for the latter.”

The BRP will now propose that the Business Rescue Plan be amended to move forward with a structured winding down. In terms of this option, the BRP anticipates being in a position to pay an initial dividend (70% of the projected dividend) to creditors within 30 days of the adoption of the amended Plan, with the balance to be paid within three to five months thereafter.

According to the latest financial review of the company, the airline has no current assets but a cash balance of about R383 million ($21.7 million).

RELATED

Norse Atlantic reports stronger financial and operational figures for 2Q25

The post South African carrier Mango Airlines faces closure after sole investor withdraws appeared first on AeroTime.

Go to Source