During today’s address to the Mozambican Parliament, Minister Mateus Magala focused on the restructuring of state-owned transportation and communication companies, specifically Linhas Aéreas de Moçambique (LAM) and Moçambique Telecom (TMCEL).
LAM’s Challenges & Transition
LAM has faced financial difficulties with high debt and increasing losses. Operational issues, like expensive ticket prices, hinder accessibility. A thorough assessment, aided by international consultants, revealed the severity of LAM’s situation, necessitating urgent action. Liquidation, controlled bankruptcy, or privatization were proposed, but finding suitable international partners proved challenging. After extensive research, South Africa’s Fly Modern Ark (FMA) emerged as the best choice for managing LAM’s transition.
To stabilise LAM, a Transitional Council was established, comprising representatives from the Ministries of Transport and Communications, Economy and Finance, and the Institute for State Equity Management (IGEPE). The Aviation Group identified FMA as the partner capable of stabilising LAM. FMA’s fees will be covered by LAM’s generated resources.
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TMCEL’s Complex Financial Situation
TMCEL faces greater complexity, burdened with over $400 million in debt and declining market share. The company’s reputation and customer perception have also suffered. The government aims to stabilise TMCEL and unlock its potential. TMCEL confronts significant financial and operational challenges. A government-commissioned report warns of potential collapse and insolvency without appropriate measures. The proposed solution involves seeking a strategic partner, preferably a multinational telecommunications operator, through an 80% share sale. The government would assume all debts and loans while reducing the workforce by 60%, stabilizing TMCEL’s finances for broader structural reforms.
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While an international advisory group is being formed to analyze TMCEL-related reports, the Ministry of Transport and Communications and IGEPE have initiated immediate interventions. The TMCEL Transition Council, led by ministers and the IGEPE president, collaborates with the TMCEL Group, comprising experienced managers in telecommunications, overseen by the Ministry of Transport and Communications. TMCEL, born from the merger of TDM and MCel, is a strategic company capable of financing Mozambique’s economy and improving citizens’ lives. According to Minister Magala, the government is committed to realising this potential, respecting employee and creditor rights throughout the process.
