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    Mango

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    Jacaranda FM News

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    IN THE HIGH COURT OF SOUTH AFRICA GAUTENG LOCAL DIVISON, JOHANNESBURG Case No: In the matter between: MANGO PILOTS ASSOCIATION First applicant SOUTH AFRICAN CABIN CREW ASSOCIATION Second applicant NATIONAL UNION OF METALWORKERS SOUTH AFRICA Third applicant and MANGO AIRLINES SOC LIMITED Respondent FOUNDING AFFIDAVIT |, the undersigned, ZAZI MOLOBANE NSIBANYONI-MUGAMBI do hereby make oath and say: 1. | am an adult female and the president of the second respondent, the South African Cabin Crew Association (SACCA). | am duly authorised to depose to this affidavit on behalf of the first, second and third applicants. 2. Save where expressly stated or where the context indicates to the contrary, the facts contained in this affidavit are within my personal knowledge and are, to the best of my belief, both true and correct. 3. Where | make legal submissions | do so on the advice of my legal representatives, which advice | believe to be true and correct. PARTIES 4, The first applicant in this application is the Mango Pilots Association (MPA), a branch of the Airline Pilots Association of South Africa, a trade union duly registered in terms of the Labour Relations Act, 1995 (LRA) with registration number LR 2/6/2/273. 5. The second applicant in this application is SACCA, a trade union duly registered in terms of the LRA with registration number LR2/6/2/1087 and with its head office at 89 12" Street, Orange Grove, Johannesburg, 6. The third applicant in this application is the National Union of Metalworkers, of South Africa (NUMSA), a trade union duly registered in terms of the Labour Relations Act, 1995 and its head office at 153 Lilian Ngoyi Street, comer of Gerard Sekoto Street, Newtown, Johannesburg 7. In this affidavit | will refer to the MPA, SACCA and NUMSA collectively as. the Applicants. 8 The respondent is Mango Airlines SOC Limited (Mango), a public company incorporated in accordance with the company laws of the Republic of South Africa, with registration number 2006/018129/30 and with its registered address at Mezzanine Level, Domestic Departure Terminal, OR Tambo International Airport, Kempton Park, Johannesburg. Mango is a wholly owned subsidiary of South African Airways SOC Limited (SAA). SAA entered business rescue on 5 December 2019 and is currently still in business rescue. PURPOSE OF THIS APPLICATION a4 9.2. 10. "1 | depose to this affidavit in support of the Applicants’ urgent application to: place Mango into business rescue in terms of section 131 of the Companies Act, 2008 (the Act) on the grounds that Mango is financially distressed but that there is a reasonable prospect of rescuing Mango; and appoint Mr Ralph Lutchman of Concord Administrators (Pty) Ltd (Mr Lutchman) and Ms Lebogane Mpakati as the joint business rescue practitioners of Mango with a second joint business rescue practitioner to be nominated by the board of SAA. Mango faces a pending liquidation application. However, despite continued promises by SAA, Government and the board of Mango itself to place Mango under business rescue, and despite the fact that all stakeholders concur that Mango is a proper and fitting candidate for such a rescue, this has not occurred. Out of sheer good will the employees of Mango whom the Applicants represent have continued to render their services, without payment, for some 6 months. They cannot be expected to do so indefinitely and if the order sought in this application is not granted they will down tools and Mango, which already faces a pending liquidation application will almost inevitably face an uphill battle if a decision is made at some indeterminate 12. future time to place it in business rescue. There may well be no business left to rescue. This will lead to a liquidation, to the extreme prejudice of all affected persons, including the Applicants’ constituency. (On the other hand, if the order sought in this application is granted, the pending liquidation application will be stayed and the irreparable prejudice to all stakeholders and affected persons will be averted through an orderly rescue process. LOCUS STANDI 13. 14, The Applicants are registered trade unions representing employees of Mango and are therefore affected persons as defined in section 128(1)(a) of the Act. The Applicants therefore have locus standito bring this application to place ‘Mango into business rescue RELEVANT BACKGROUND FACTS 15: 16. On 5 December 2019 SAA (Mango's parent company) was placed into business rescue. During March 2020 South Africa was placed under a national lockdown by President Cyril Ramaphosa on account of the COVID-19 pandemic. Mango (along with all other airlines) was not permitted to fly for a number of months as a result of the lockdown restrictions. This obviously had a severe negative impact on Mango's revenue. 17. 18. 19, 20. at 22, During June 2020 the Mango board of directors raised the possibility of placing Mango into business rescue On 10 February 2021 representatives of the Applicants engaged with Mango’s management and chief executive officer. (CEO), Mr William Ndlovu requesting direction and enquiring as to the future plans for Mango. At that stage funding had been promised to Mango by Treasury and SAA, which funding had not materialised despite promises having been made that it would be received by the end of January 2021. The representatives of the Applicants were advised that Mango was awaiting clarity from its shareholder, SAA. On 23 March 2021 Mr Ndlovu (the CEO of Mango) advised representatives of the Applicants that the funding was still outstanding and that lessors were becoming intolerant of deadlines being missed. On 1 April 2021 Mango's fleet sank to three aircrafts from five. Prior to the COVID-19 pandemic Mango's fleet consisted of 14 aircrafts. On 22 April 2021 the CEO of Mango advised Mango's employees that Mango would “hibernate” given that there were no funds to pay creditors, Business rescue was proposed but apparently was not entered into on the basis that shareholder approval was not forthcoming. On 24 April 2021 the Applicants members and representatives wrote to the Minister of Public Enterprises, Pravin Gordhan (Minister Gordhan), requesting an urgent meeting to discuss the precarious situation at Mango. 5 gat ee 23. 24. 25, 26 No response was received to that letter. A copy of that letter is attached as “FA1". On 30 April 2021 SAA exited business rescue and were therefore able to assist Mango in continuing its operations. On 3 May 2021 Aergen Aircraft Four Limited (Aergen Four) and Aergen Aircraft Five Limited (Aergen Five) (companies from whom Mango leases aircraft) launched an application under case number 21207/2021 in which they sought an order placing Mango under final winding up (the Liquidation Application). According to the notice of motion in the Liquidation Application, in the event that no opposition to the Liquidation Application was received, it would be heard on 1 June 2021. Mango ticket sales decreased dramatically as a result of the Liquidation Application. | have since been advised that Aergen Four and Aergen Five agreed to defer the hearing of the Liquidation Application until sometime in August 2021, on the request of Mango's attorneys, Bowmans Attorneys, in order to give Mango time to commence business rescue proceedings. To date, however, (and despite the board of Mango having requested authorisation to proceed with business rescue proceedings from its shareholder, SAA) no business rescue proceedings have been commenced and the Liquidation Application remains pending On 11 May 2021 the Applicants wrote to the board of SAA seeking urgent clarification on what SAA had planned for Mango's continued operations. In that letter, the Applicants recorded that. 27. 274. 27.2. 273. 27.4. 275. “Mango Airlines SOC’s perilous financial position is now firmly in the public domain. We as employees were alerted to this situation in a meeting held on the 22nd of April with our CEO, Mr. Ndlovu. During that meeting which he followed up with an email to staff later that day, Mr. Ndlovu advised us that the company was going to cease operations and that a formal request had been sent to the shareholder, the SAA Board, to place Mango Airlines SOC into Business rescue. Whilst this news came as a shock to us as staff, it was certainly no surprise given that we have had several engagements with our management team throughout the last twelve months. Going into Business Rescue seemed the most prudent and responsible way to save the company and allow it to emerge from this crisis, thus saving a valuable asset for the shareholder and protecting as many jobs as possible for the employees of Mango.” In that letter the Applicants also requested clarity in respect of the following matters: the status of the request by the board of Mango to be placed into business rescue; the status of interim funding to Mango to allow it to continue operations whist the Appropriation Bill made its way through parliament; whether the full allocation in the above-mentioned Appropriation Bill of R819million would be passed onto Mango; whether the SAA board intended to oppose the Liquidation Application; and why, if it was the intention of the board to keep Mango flying, were forward bookings not opened into the future. 28, 29, 30. 31 32 33. A copy of that letter is attached, as “FA2’. SAA’s company secretary acknowledged receipt of "FA2". On 20 May 2021 the Department of Public Enterprises (DPE), made contact with the Applicants in order to arrange a meeting with Director General Kgathatso Thakudi (the DG) for 12:00 on 24 May 2021 The DG instead send his deputy, Ms Nonny Mashika, to handle the meeting. However, no information was forthcoming at that meeting and all questions raised by the Applicants were, according to Ms Mashika, to be referred back to the board of SAA for answers. In that regard Ms Mashika advised that “SAA had been empowered with the plan” and that it would be an “overreach for the DPE to divulge the plan to organised labour’. On 31 May 2021, after being directed to do so by the DPE at the meeting on 24 May 2021, the Applicants again requested a meeting with the board of SAA On 3 June 2021 the board of SAA wrote to the Applicants referring us back to the executive management of Mango on the basis that the executive management have “been fully mandated to handle all employee related matters with the support of the Mango Airlines Board”. A copy of that letter is attached as “FAS” On 7 June 2021 representatives of the MPA met with members of the Mango executive committee and CEO, Mr Ndlovu. Mr Ndlovu advised that he and the board were still awaiting clarity in respect of the intended 8 We ( ass 34. 35, 36. 36.1 36.3. direction of Mango from the DPE with regard to business rescue proceedings and the pending Liquidation Application. On 11 June 2021 Minister Gordhan announced that the Takatso Consortium, comprising Harith General Partners, a leading investor in African infrastructure and airports, and airline management firm Global Airways, had been selected as the preferred strategic equity partner for SAA. A copy of the announcement is attached, marked “FA” No clarity was given on how subsidiaries of SAA would be dealt with through this deal. Instead, Minister Gordhan stated in respect of the subsidiaries that “[als part of the due diligence process, the DPE and the Consortium will carry out a joint assessment on the future of the subsidiaries” On 17 June 2021 the Applicants wrote to Minister Gordhan requesting an urgent meeting to clarify how Mango would fit into the strategic equity partnership. In addition, the Applicants requested clarity on the following aspects: whether jobs would be retained in the proposed merger, whether Mango would be permitted to enter business rescue proceedings and restructure its debt or whether the DPE would be willing to recapitalise Mango's business; whether the Liquidation Application would be opposed and/or settled; and 36.4. 37, 38. 39. 40. a1 given that the board of SAA had only permitted Mango to sell tickets until 30 June 2021, when that restriction would be lifted in order to enable flights to be operated at profitable capacity levels. A copy of that letter is attached, marked "FAS". To date, no response has been received from Minister Gordhan On 21 June 2021 the Mr Ndlovu advised Mango's staff that there was no money whatsoever to pay salaries and that funding had been applied for but not received, To date there has been no clarity regarding whether or not funding will be received from SAA On 24 June 2021 the Special Appropriations Act, 2021 (Appropriations Act) was assented to and on 28 June 2021 it was published in the Govemment Gazette and took effect. In terms of that Act provision was made for R819miilion to be allocated to Mango. On 1 July 2021 the Applicants were advised that the SAA board had approved funding for Mango employees’ June 2021 salaries and that the matter would be confirmed by the DPE. To date, no further indication of when these salaries will be paid has been forthcoming. However, despite not being paid, Mango's employees continue to do their work and Mango remains operational because of these employees’ good will On 7 July 2021, after receiving no further direction from the board of SAA or Minister Gordhan, the Applicants addressed a letter to President Ramaphosa setting out the events referred to above and imploring him to intervene in the situation in order to save the hundreds of jobs (and 42. 43. 43.41 43.2. 43.3. thousands of people depending on those jobs) that would be lost in the event that Mango is liquidated. A copy of that letter is attached as “FAG” On 15 July 2021 representatives of the Applicants met with the Deputy General of the DPE. At that meeting the Deputy General advised, amongst other things, that the funds allocated to Mango under the Appropriations Act (R819million) would only be paid to Mango once Mango was in business rescue. After the meeting on 15 July 2021 the Applicants addressed a letter to the Minister Gordhan, the DG, the Minister of Finance, the board of Mango and the chairperson of the board of SAA (‘FA’). In that letter the Applicants: referred to section 3(2) of the Appropriations Act which provides that the Minister of Finance may, on request of the Minister of Public Enterprises, approve any portion of an amount referred to in the Schedule for a subsidiary of SAA for use by another subsidiary of SAA, referred to in the Schedule, to address urgent funding needs; referred to the Schedule to the Appropriation Act in terms of which an amount of R819million had been allocated to Mango; recorded that our understanding from the meeting was that in order for the, DPE to procure the allocation of the funds contemplated in the Appropriations Act to Mango, and by extension its operations and employees, Mango would have to be placed into business rescue; 43.4. 435. 43.6. 43.7. 43.8. 43.9. 43.10. advised that the Applicants were in support of an appropriately managed business rescue process; expressed concern that the production and implementation of a business plan might take some time and that this would leave the employees of Mango in a dire situation; proposed that Mango be placed into business rescue urgently and that proactive business rescue practitioners be appointed in order to run the business and ensure funds contemplated in the Appropriations Act are provided to Mango; identified and proposed Mr Lutchman as the business rescue practitioner for Mango; proposed that the DPE nominated an additional business rescue practitioner to work together with Mr Lutchman in order that the business rescue practitioners enjoy the support of all stakeholders and have the confidence of government and the employees; in regard to the Liquidation Application, requested Mango to advise which attorneys it had appointed to oppose the liquidation application, whether it had filed a notice of intention to oppose and an answering affidavit, and if so, to please provide us with copies of those documents; advised that, in circumstances where business rescue had become urgent, it was incumbent upon either the Applicants, the board of Mango or the DPE to counter-apply for a business rescue on its merits; and 2 ae 43.11.requested the Mango board to advise by no later than 17:00 on 44. 45, 46 July 2021 whether it intended to bring a counter-application for business rescue on an urgent basis, failing which the Applicants would have no choice but to intervene on behalf of their constituents to move the counter-application for business rescue. Also on 15 July 2021 Ms Mashika of the DPE addressed an e-mail to the. Applicants (“FA8") recording the following: “The meeting with the Department on 15 July 2021 has reference. Please note that we are processing the matters raised and we hope to provide feedback on them by early next week As everyone recalls, we agreed to provide feedback on: 1. The Mango restructuring decision, which will require Department and Mango and SAA Board to align on the optimal restructuring option. 2. The payment of outstanding salaries is dependent on the restructuring decision as the NT appropriation conditions are that the funds are provided for the restructuring effort, not to fund operational shortfalls. 3. The functioning of workplace forums has been raised with the SAA Interim Chairperson and the Mango Chairperson we have requested that engagement with organised labour be stepped up.” [own emphasis] On 16 July 2021, the board of Mango responded to the Applicants’ letter of 15 July 2021 (“FA7") as follows: “Mango Board took a resolution on 16 April 2021 to put Mango into business rescue. This was then sent to SAA Board for support. SAA Board supported Mango resolution and in turn they forwarded their resolution to the ultimate shareholder Department of Public Enterprise (DPE) to support the business rescue resolution. » Ve atc wy 46. 47. 48. However, while waiting for the response from DPE, Aergen Aicraft Five Lid (Aergen) served Mango with liquidation papers on 28 April 2021. Mango appointed Bowmans Attomeys to assist with the liquidation matter. After engagement with Aergen it was agreed to postpone the liquidation matter from June to August 2021. This was agreed to as it provided the space to put Mango into business rescue. After this DPE requested that it be provided with a financial sustainability report for Mango. SAA then appointed a Business Rescue Practitioner (BRP) to assist with this exercise. The BRP performed the exercise and recommended that Mango be put into business rescue. This report was submitted to DPE by SAA board and to date they are still waiting for DPE's response. [own emphasis] A copy of that letter is attached, marked “FAQ”. It should be noted that although that letter refers to a letter from the Applicants dated 15 June 2021, this is a typographical error and should be reference to the Applicants letter of 15 July 2021 ("FA7”). Clearly, both the board of Mango and the board of SAA are in favour of placing Mango into business rescue. It appears as though the “bottleneck” prohibiting the commencement of business rescue proceedings is the DPE. Furthermore, | am advised that while there is a pending liquidation application in respect of a company, that company may not commence voluntary business rescue proceedings. Hence the need for this application. On 17 July 2021 the Applicants addressed a further letter to the Minister of Public Enterprises, the Director General of the Department of Public Enterprises, the Minister of Finance, the board of Mango and the board of SAA as follows: We refer to our letter dated 15 July 2021 and to the respective correspondence received from Mr Mashika of the Department of Public Enterprises (DPE) and Mr Ndlovu of Mango Airlines POC Ltd (Mango). Copies of the correspondence are attached hereto for ease of reference. At the outset we believe that it is in the interests of all the parties, but particularly the creditors of Mango and the public at large, that we work together in order to ensure the viability of Mango. We want to work together with both National Treasury and the DPE to achieve the common goal, We reiterate that it is our view that Mango needs to be placed in business rescue as a matter of extreme urgency. The board of Mango is unable at present to place Mango in business rescue by way of board resolution in light of the pending liquidation application brought by Aergen Aicraft Four Ltd and Aergen Aicraft Five Ltd. We are, however, prepared to launch an urgent High Court application on behalf of our members to place Mango in business rescue. We, however, would like to do so with the cooperation and support of all the role players. The application will be based upon our belief that there is a sustainable business rescue plan in respect of Mango which, if adopted by the stakeholders of Mango, will result in Mango being able to resume its full operations following the business rescue process. If, however, the DPE would prefer that the urgent business rescue application is brought by the DPE itself (or altematively Mango with the approval of ‘South African Ainways SOC Ltd (SAA) and the DPE), we would, of course, support that process. From correspondence received from Mango, it appears that SAA has appointed a business rescue practitioner to prepare a financial sustainability report for Mango, which report has been submitted to the DPE for approval. Unfortunately, the creditors and staff of Mango have reached a tipping point whereby there are no longer able to wait for any further delays and have no option but to motivate for the urgent business rescue referred to above. In light of the dire circumstances please can we receive a substantive response from National Treasury, the DPE, SAA and Mango as a matter of urgency, and by no later than 10:00 on 20 July 2021, whether they support the approach suggested in this letter and what steps will be taken to achieve the business rescue. A copy of that letter is attached, as "FA10". After receiving no response to “FA10", on 20 July 2021 the Applicants released a joint statement titled “SACCA AND MPA REJECT THE SILENCE FROM THE DPE REGARDING MANGO SALARIES". A copy of that statement is attached as “FA11”. That statement reads as follows: “The South African Cabin Crew Association (SACCA), The Mango Pilots Association (MPA) and National Union of Metalworkers South Africa (NUMSA), have noted the deliberate silence of the DPE (Department of Public Enterprises) in addressing the future of Mango and instituting business rescue proceedings of Mango Airlines SOC as requested and recommended by the Mango board and SAA board and their appointed business rescue specialists. Today, in collaboration, the MPA, SACCA and NUMSA will file an application with the high court to intervene in the liquidation application of Mango by Aergen Four Aircraft LTD and Aergen Five Aircraft LTD. The collaborative unions will, at the bequest of the courts, place Mango Airlines SOC into business rescue with Ralph Lutchman from Concord Administrators (Pty) LTD. Today marks a landmark case in South African history where unions fight for jobs and the survival of a state asset that has been purposely run into the ground by the Department of Public Enterprise by their lack of decision making. A time distinguished by the juxtaposition of government employees demanding a wage increase and others fighting for the survival of their jobs and working for free. Despite the fact that the Special Appropriation Act (No:44775), dealing with Mango's funding requirements, was published in the govemment gazette on the 28th of June, which cleared the way for R819 million to be allocated to the alleviation of Mango's current financial predicament. Mango employees were last paid on the in two tranches at the end of May. 50% from Mango and 50% from the shareholder, SAA. “The DPE's actions to date, appear to suggest there are ulterior motives are at play. Mango has continued to operate at the continued insistence of the DPE since June 2020, yet the DPE seem to be quite happy to allow the hard- working employees of Mango to subsidize this decision through the provision of their services for little or no remuneration. They have misrepresented the promise of funding to Mango management, employees, services providers and creditors, promises that can be construed as fraud.” comments the Chairman of the MPA, Captain Jordan Butler. Mango employees, on average, are already owed 6 month's salaries from the company. Salary that the company has undertaken to pay back to employees in a CCMA settlement agreement! With each passing day it becomes more difficult for employees to get to work as their personal financial circumstances become more dire. “Is it DPE's goal to have Mango staff rack up personal debt to fund the state-owned company?” asks Zazi Nsibanyoni-Mugambi, SACCA President. Since July 2020, SACCA the MPA and NUMSA, as well as non-unionized staff, have continuously written to the Board of Mango, the board of SAA and the Minister of Public Enterprises. All these efforts have been rebuffed! Most notably, Minister Gordan's office has often failed to even acknowledge receipt of our communications let alone provide a response. The SAA board did respond but only in So far as passing the buck back to Mango management to deal with our requests for information, information that he Mango Exco and board are not privy to. Out of sheer frustration and in the face of the utter futility in seeking information from the organs of state responsible for their constitutionally mandated task of overseeing the welfare of Mango Airlines SOC, the MPA, SACCA, NUMSA and other unions as well as nonunionized staff wrote to the President Ramaphosa on the 7th of July to plead with him to intervene and hold Minister Gordhan to account for his department's total disregard for the welfare of Mango Airlines and its employees. 7 Should the approved funding not be forthcoming, the DPE will stand accused of not only misleading the Management and employees of Mango Airlines but also the airlines’ customers, creditors and suppliers, who have also stuck with the airline and it's well established brand, through these trying times. The collaborative unions of Mango will by any means available to them, fight against the state capture that has permeated down from SAA to Mango to ensure as many Jobs as possible can be saved. It is estimated that as many ‘as 10000 people, both directly and indirectly depend on Mango Airlines for income. Mango is a successful structure the government will see dismantled in favour of their new Takatso consortium and private industry that would provide at most, 1 tenth of the jobs (in comparison to LIFT) that have yet to be created. This is in addition to the 3000 direct jobs that have already been lost at SAA in the last 18months and the jobs that will be lost through the retrenchment process at SAAT( South African Airways Technical) and Airchefs." REASONABLE POSSIBILITY OF RESCUING MANGO 51. 52. 53. Whilst the situation at Mango is currently extremely urgent and dire, Mango can easily be rescued using existing assets and re-allocation of funds. Furthermore, and from the correspondence referred to above, it is clear that both the Mango and SAA boards support Mango being placed into business rescue. SAA has already engaged with a business rescue practitioner to prepare a financial sustainability report, which report apparently recommends that Mango be placed into business rescue. | attach as “FA12° a PowerPoint presentation prepared and shared with the Applicants by the executive management of Mango which summarises the case for the business rescue of Mango. Whilst the Applicants are independent parties who are not privy to the intricacies of the daily operations and/or finances of Mango, from “FA12” a clear picture is 18 WY 54. 55, 56. 57, 58 59. 60. presented whereby Mango, if placed under business rescue, will be profitable again by 2023 or 2024 The third page of “FA12" summarises the current financial position of Mango as follows: Mango re-started operations on 15 June 2020 after the COVID-19 lockdown traveling restrictions were relaxed; Up to that point Mango had accumulated debt of R1 billion (including debt in respect of forward sales of around R300million); and The debt has since increased to R2.Sbillion and forward sales liability has reduced to R174million. The financial models for two business rescue scenarios are then set out on pages 4 and 5 of *FA12" Page 12 of “FA12” sets out the projected balance sheet on the basis that business rescue is entered into and Mango's lower base cost is achieved. From that schedule it is clear that Mango would reach financial viability by 2023 if the proposed business rescue process is properly implemented. Pages 13 and 14 outline how Mango would reduce its labour, operating, IT, maintenance and ground handiing costs over the next two years. Page 14 confirms that the cost of recapitalising Mango is estimated to be R154million (which would easily be covered by the R819million allocated to Mango in terms of the Appropriations Act), 19 61 62, 63 Pages 23 to 25 of “FA12" show projected income statements for 2022, 2023 and 2024 on the basis that the business rescue plan will be implemented. These income statements suggest that Mango will incur a loss of R3 887 006.36 in 2022, will earn a profit of R97 555 146.77 in 2023 and RR146 519 460.92 in 2024. From what is set out above the Applicants are confident that with a properly implemented business rescue plan and access to the R819million allocated to Mango under the Appropriations Act, Mango can be successfully rescued Mango directly employs over 750 staff. The ancillary jobs it creates through its service providers, of which there are many, some of which are other SOEs (SAA technical, Airchefs ATNS, ACSA, the SA weather service etc.) is estimated to be in the thousands. In turn each employee supports, on average, a family of four. It is estimated that in total approximately 10 000 people depend on Mango for some form of livelihood, URGENCY 64, 65. For the reasons set out above this application is clearly urgent. Mango is currently in dire financial straits and, unless the funding allocated to Mango by the Appropriations Act is received before the first or second week of August 2021 Mango will have to shut down its operations completely 67. 68. As set out above, if Mango shuts its doors, 750 people will lose their jobs and approximately 10 000 people will lose their livelihoods and become destitute. This is, with respect, not something that this Court should permit to happen. As at the end of July 2021, Mango owes an amount to its employees in unpaid salaries in the amount of approximately R157million. Mango's employees have not been paid their salaries since May 2021. Unless funding is provided to Mango so that these salaries can be paid, the employees (pilots, cabin crew and ground staff) will have no option but to “down tools” and search for employment elsewhere. Should that occur, any possibility of rescuing Mango will disappear. In support of the dire situation that Mango's employees and their dependants currently find themselves in, | attach as “FA13" an e-mail from Mr Ndlovu to Mango’s employees on 21 July 2021 in which he states: “Today is the 21st July 2021 and we have not received salaries for June 2021. We are probably wondering what is going to happen on 25th July 2021? | wish | had good news and | don’t. Since our last communication DPE has not approved SAA financial assistance application and reasons for not approving are not given. At this point, our only hope is to receive the funds as allocated per the appropriation bill. We have been informed that DPE is still ironing out some technical issues with National Treasury before these funds could be released. Hopefully this could be cleared before the end of July 2021 so that we get funds to pay salaries and other critical creditors. We shall update you should anything change from what is being communicated. This too shall pass!” we 69. Mr Danie Jacobs, Mango's Responsible Person: Flight Operations, forwarded Mr Ndlovu’s e-mail to various employees of Mango (also included in annexure “FA13") saying “Good day Ladies and Gentlemen. Hope you are okay under these very difficult circumstances that we all find ourselves in. Please see e-mail below. From my side, thank you for everything that you are all still doing. I really appreciate each and everyone's effort. If can help with anything, please contact me by e-mail, SMS, whatsapp or a telephone call. | will bend backwards to help as far as | can! Stay strong and safe. 70. Also in response to Mr Ndlovu's e-mail ("FA13"), Ms Diagracia Letsie, Mango's Cabin Services Manager, send Mr Ndlovu's e-mail to various Mango employees saying: “Dear ALL | was tempted to say | hope you are all well but then | thought this will be very insensitive of me based on what is happening in our country and the situation at our workplace | just wanted to let you know that | do think and pray for everyone and hoping that we will all get the strength to deal with every challenge we are faced with. Thank you for staying positive even when there’s no reason to do so, We will overcome this. DUR and JNB crew and families please be safe and beware of your surroundings. Thank you for your continued dedication | truly appreciate you." [sic] we 22 nm 72. 73, A copy of that e-mail is attached as “FA14”, The Applicants have all been advised by their respective members that they cannot continue to work unpaid past the end of July 2021. The Applicants have managed to convince certain their members to continue providing their services until at least 3 August 2021, when this application is set down for hearing. However, the employees’ desperation is palpable and it will not be possible for the Applicants to convince their members to remain working past 3 August 2021 without being paid. | attach marked “FA18’ a bundle of e-mails sent from members of SACCA confirming that they cannot attend at work because they do not have any money for petrol and/or transport as a result of not being paid their salaries. Clearly this application is urgent EVENTS OF 22 AND 23 JULY 2021 74. At 21:24 on 22 July 2021 Mr Jordan Butler, the chairperson of the MPA received an e-mail from Mr Ndlovu (the CEO of Mango) confirming that the board of SAA and the DPE were in agreement that Mango should be placed into business rescue immediately. A copy of the e-mail is attached as “FA16’. The e-mail reads as follows: “Today | was requested to send you an e-mail by the SAA board and the CEO and share with you the following. 1. The Board received a concurrence from DPE/Minister to put Mango into business rescue with immediate effect this afternoon on Thursday, 22 July 2021 2. Ameeting was then held at 15:00 to inform both SAA board and Mango Board. a. From this meeting it became clear that SAA board need to move with speed to appoint the attorneys who will file the court papers b. Resolutions in this regard needed to be passed to ensure the appointment is done as soon as possible c. The need to engage with stakeholders key being the Union with the business rescue application. i Onthis matter the Board and SAA CEO requested that they be given until close of business on Friday, 23 July 2021 to officially respond to the Union as the union previously requested. Late as it may be they say they could not respond until they hear from the Minister as they did today. Close of business for this purpose will be 17:00. ji Accompanied with this request to be given time, the Board and the CEO will be engaging the DG and the Minister tomorrow to get them to approve the advance to be given to Mango to pay salaries. This is supported by the fact that DPE has agreed to business rescue therefore they do not see reasons not to approve the advance for salaries. 3. The SAA board will also tomorrow provide Mango with a formal notification that it will be placed on business rescue and given permission that this be shared with the union. 4. Further, they have been advised that it could be risky if the Union goes it alone without the support of DPE as DPE are the ones who still have to provide the funds. Therefore giving SAA Board the opportunity to apply will work out better for all the parties involved In summary this is what | have been requested to communicate to you and the SAA Board and the CEO are humbly requesting you to consider this positively.” 75. The Applicants responded to that e-mail by sending a letter to Minister Gordhan, the DG, the board of SAA, the board of Mango and the Minister of Finance at 10:15 on 23 July 2021 as follows: “1. We refer to the e-mail sent from the acting chief executive of Mango Airlines SOC Ltd (Mango), Mr William Ndlovu, to Mr Jordan Butler, the chairperson of the Mango Pilots Association at 21:24 on Thursday, 22 July 2021. 2. In respect of that e-mail Mr Ndlovu confirmed that the board of Mango had received concurrence from the Department of Public Enterprises (DPE) and the Minister of Public Enterprises, Minister Gordhan, to put Mango into business rescue with immediate effect. A copy of that e-mail is attached to this letter. 3. Please would all the parties copied on this letter confirm that the contents of Mr Ndlovu's e-mail are indeed correct. 4. As indicated previously, we have prepared an application to place Mango into business rescue which is ready to be launched immediately. It would seem unnecessary in the circumstances for SAA to incur costs in briefing attomeys to bring a separate application requesting the same relief. What we propose is that we proceed to launch the application and either agree to a consent order or amend the application to include SAA as a co-applicant. 5. Aswith SAA, itis essential that two business rescue practitioners are appointed — one to represent the shareholder and the other to represent Mango's employees. Please would you provide us with the details of your preferred business rescue practitioner so that it can be included in the application and/or the agreed order. 6 For reasons previously stated, at this stage it is critical for our members to be paid their salaries for June 2021 and July 2021. This must be included in any business rescue plan. 7. We appreciate the sentiment expressed in Mr Nalovu's e-mail and accept that it was made in good faith. Our members are hopeful that we have now 76, 77. 78. turned the comer where all stakeholders are on the same page working to ensure the viability of Mango and thereby protecting the livelihoods of the employees and their families. In the circumstances, please would you confirm by 14:00 that you ae agreeable to what is proposed in this letter. We wait to hear from you. If we do not hear from you we will have no alternative to launch our application. Hopefully this will not be necessary. To the extent that there is any clarity that you require please would you contact Mr Jordan Butler on 0767446300 to discuss.” A copy of that letter is attached as “FA17" At 14:00 on 23 July 2021, no response to “FA17" had been forthcoming. At 15:58 on 23 July 2021 the Applicants received a letter from the board of SAA as follows: ‘9 We acknowledge receipt of your letter of even date regarding the captioned matter. By way of context, the matter of the financial challenges facing Mango have been deliberated on by the SAA Board as the shareholder and a decision was made earlier in the year to place the company under business rescue, $0 as to ensure its continued existence. SAA’s decision to place Mango under business rescue required the concurrence of its Shareholder, the Department of Public Enterprises (‘DPE’) in terms of the governing instruments between SAA and DPE; Shareholder concurrence was received by SAA on Thursday 22 July 2021, as communicated to yourselves by the Mango Acting CEO, Mr William Ndlovu. Without derogating on the urgency of the matter, the SAA Board requires and requests more time to deliberate and consult on your proposed process, We tender to revert to you by 9h00 on Monday. 6 The SAA Board undertakes to give you regular feedback as the process unfolds. 7. We trust that you will find the above in order.” 79. A copy of that letter is attached as “FA18". CONCLUSION 80. For the reasons set out above, the Applicants request that the Court grant an order in respect of the notice of motion to which this affidavit is attached, gp NI DEPONENT Signed and swom to before me at /

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