The Mozambican government has enabled the sale of 91% of LAM to HCB, CFM, and EMOSE to finance eight new aircraft. Eligible companies must periodically report on their management. LAM is currently sourcing Embraer and Boeing aircraft, while facing corruption investigations and leadership changes amidst ongoing operational problems.
The Mozambican government has authorized the sale of 91% of its stake in Linhas Aéreas de Moçambique (LAM) to three selected state-owned companies. This decision, announced by Council of Ministers spokesperson Inocêncio Impissa, aims to utilize the funds from the sale, estimated at $130 million, for acquiring eight aircraft and restructuring the airline.
The companies eligible to purchase these shares are Cahora Bassa Hydroelectric Plant (HCB), Mozambique Ports and Railways (CFM), and the Mozambican Insurance Company (EMOSE). These companies will be required to report regularly to the government on their management and the impacts of their involvement in LAM’s restructuring.
LAM is currently seeking suppliers for Embraer ERJ190 and Boeing 737-700 aircraft, with a notice published for interested companies to submit proposals. This solicitation is active until February 7. Additionally, LAM recently returned a Boeing 737-300 cargo plane to Indonesia due to operational issues and lack of national certification.
In recent management changes, Marcelino Gildo Alberto has been appointed as LAM’s new chairman, marking the third such leadership change in under a year. Following previous management by Fly Modern Ark, allegations of embezzlement and corruption have emerged, prompting investigations by Mozambique’s Central Office for Combating Corruption (GCCC). LAM faces ongoing operational challenges despite serving 12 domestic destinations and multiple regional flights, including to Johannesburg and Cape Town.
The sale of LAM’s majority stake represents a significant shift in Mozambique’s approach to managing its state-owned enterprises, particularly in the aviation sector. Faced with chronic operational difficulties, the government seeks to leverage state-owned companies’ potential for effective management while addressing financial constraints through the capital raised. The involvement of the GCCC indicates a crackdown on corruption within the airline, aiming to instill greater accountability in public service operations.
The Mozambican government’s decision to sell 91% of LAM to state-owned companies aims to inject vital funds for fleet expansion and restructuring. With strict oversight mandated for the acquiring companies, this strategy reflects an effort to revitalize LAM amid ongoing operational difficulties and allegations of corruption. Continuous management changes and past issues highlight the challenges faced within the airline industry in Mozambique.
Original Source: clubofmozambique.com
