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Mozambique considering privatising airline LAM and telecom Tmcel

Both companies reported to be ‘technically insolvent’; improving control of public debt part of commitment made to IMF for US$470 million financial assistance programme.

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Both companies reported to be ‘technically insolvent’; improving control of public debt part of commitment made to IMF for US$470 million financial assistance programme.

ARTICLE BY

PUBLISHED

READING TIME

Less than 1 minute Minutes

UPDATED: 22 Dec 2023, 12:48 am

Mozambique is considering privatising Mozambique Airlines (LAM) and Tmcel (telecommunications) to rescue the two companies given the “complicated financial situation” in which they find themselves, according to Lusa News Agency. A decision is expected by December.

An analysis by the Centre for Public Integrity, a Mozambican non-governmental organisation, published last week, said that the two companies were technically insolvent and needed capital injections and state guarantees to respond to creditors and, as such, represented a high risk to public accounts. 

Last Sunday the minister for transport and communications, Mateus Magala, told the private television channel, Media Mais, that the privatisation of both companies is being considered.

In August, the minister of economy and finance, Max Tonela, acknowledged that LAM and Tmcel needed to be restructured to move towards sustainability. 

“We have been discussing the case for restructuring LAM and Tmcel,” he stressed. 

The changes at the two companies, he added, are part of a restructuring of the state business sector (SEE) aimed at the financial recovery of those facing difficulties. 

Strengthening the supervision and management of SEE companies and improving control of public debt are commitments made by the Mozambican government to the International Monetary Fund as part of the financial assistance programme of US$470 million until 2025. 

 

UPDATED: 22 Dec 2023, 12:48 am

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