The Mozambican government is selling 91% of LAM shares to three state-owned companies—HCB, CFM, and EMOSE—for $130 million. This decision aims to leverage these companies’ profitability to restructure LAM, which is currently financially distressed. Minister Inocêncio Impissa highlighted the intent to implement international management strategies to improve oversight and operational efficiency within the airline.
The Mozambican government has approved the sale of 91% of Mozambique Airlines (LAM) shares to three state-owned companies: Hidroeléctrica de Cahora Bassa (HCB), the Ports and Rail Company (CFM), and EMOSE. These companies consistently generate profits, making them suitable candidates for the acquisition. The government spokesperson, Minister Inocêncio Impissa, stated that this strategy serves as an indirect management form intended to enhance oversight and operational efficiency within LAM.
With an estimated sale value of $130 million, the government aims to acquire eight new aircraft and invest in the restructuring of LAM, which is currently undergoing bankruptcy proceedings. Impissa noted that the participating companies will adhere to international management standards, which will facilitate better financial control and operational transparency.
This decision follows a decade of financial turmoil for LAM, due in part to corruption and mismanagement, which resulted in significant debts to suppliers exceeding $230 million. Over the past year, LAM had been managed by South Africa’s Fly Modern Ark (FMA) under a government initiative aimed at restoring the airline’s profitability.
The decision to sell a majority shareholding in LAM comes amidst a backdrop of severe financial challenges faced by the airline, largely attributable to corruption and mismanagement. Over the years, LAM has accrued substantial debts, prompting the government to seek innovative ways to manage and revive the company. The three state-owned companies involved in the buyout are selected for their profitability, reflecting an effort to leverage successful state enterprises to restore LAM’s financial health. The government’s strategy emphasizes rigorous management protocols inspired by international best practices, aiming to realign LAM’s operations with sustainable business models. This transition is critical for ensuring accountability and fiscal responsibility within the airline, which has struggled to meet its financial obligations.
The Mozambican government’s decision to sell 91% of LAM’s shares to three profitable state-owned companies marks a strategic move to restore the airline’s viability. By leveraging the financial stability of these companies and implementing international management practices, the government aims to mitigate past mismanagement issues and oversee LAM’s resurgence. This initiative represents a crucial step in addressing the airline’s debt crisis and operational inefficiencies, as it seeks to achieve profitability in the long term.
Original Source: clubofmozambique.com
