Mozambique Airlines’ debt was overestimated “by mistake”

By Sita Sebastião

Mozambique Airlines (LAM) had a real debt lower than declared due to a “technical lapse,” which forced a correction that improved the company’s liabilities, said the Mozambican Minister of Transport and Communications, Mateus Magala.

“We were with an unsustainable debt because we penalized ourselves with a technical lapse or limited knowledge,” but after making “a small correction,” it was concluded that LAM “was not so bad in terms of debt,” explained Mateus Magala.

The known debt of over 282 million euros that the airline had been declaring, “in fact, it was less than that,” because part “of what was imputed as the debt was not debt,” the minister added.

The Mozambican Minister of Transport and Communications said that revaluating the flag carrier’s charges allowed for the recovery of €44.1 million in one month in favor of the company’s cash flow.

The operation was due to “the deep technical knowledge” of Fly Modern Ark, the South African company hired by the Mozambican government in April to help normalize LAM’s financial and operational situation.

According to Lusa, LAM’s new management committee announced that the company is no longer insolvent by collecting, since April, US$47.3 million in state and private debts but remains at risk of collapse.

Matos Magala also said that the company’s recovery strategy includes reactivating the Maputo-Lisbon route and exploring new destinations.

The management committee details that Brazil, India, Dubai, and China are on the airline’s radar.

“We are going to reopen some routes.”

“The first phase will be Maputo-Portugal, then the subsequent phases will be Maputo-Sao Paulo, Maputo-Guanzhou, Maputo-Bombai, Maputo-Dubai,” said Sérgio Matos, executive committee member.

With information from Forbes

News Mozambique, English news Mozambique, Mozambique Airlines (LAM)

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