Mozambique: Banco Terra announces merger with Moza Banco
In addition to the treasury financing provided by the government, @Verdade has found that Mozambique Airlines (LAM) only continues to operate because two other state-owned companies, Petróleos de Moçambique (Petromoc) and Airports of Mozambique, to which the airline owes about 5 billion meticais, have de facto financed it [by not demanding payment].
About 40 percent of LAM’s total liabilities – 16.1 billion meticais at the close of the 2017 fiscal year – is it debts to suppliers, which increased from 4.1 billion in 2016 to 6.3 billion in 2017.
A Verdade found in the Audited Financial Statements that the main suppliers the national flag airline did not pay for goods and services provided are Petromoc and Airports of Mozambique.
By the time Petromoc discontinued supplies of fuel and lubricants, LAM owed it 2.6 billion meticais.
This amount had accumulated over several years but increased between 2015 and 2016 during the administration of Silvestre Sechene, Marlene Manave, Jeremias Tchamo, João Carlos Pó Jorge (now the director-general of LAM) and Carlos Fumo.
On 31 December, 2015, LAM owed Petromoc 189,665,428 meticais, an amount that increased more than 500 percent to 1,192,182,886 meticais.
In the first year of the administration of Pinto de Abreu, Antonio Pinto, Hélder Júlio da Silva Fumo, Carlos Vasco Sitoe and Faizal Abdul Gafar, this debt continued to increase by more than one billion meticais to 2,611,607,286 meticais.
This debt contributed substantially to the state oil company’s worst-ever results. Petromoc in the meantime also had its board of directors restructured, and closed the 2016 fiscal year 3,610,332,790 meticais in the red.
But instead of collecting debt and cutting off supplies of fuels and lubricants, the Fernando Uache administration at Petromoc passed on its Mozambique fuel and lubricant operation to oil company Puma Energy Mozambique, at a time when the price of Jet A1 fuel was no longer controlled by the government.
Not being a state-owned company, despite strong connections with influential members of the Frelimo party, Puma Energy Mozambique simply subjected the supply of fuel and lubricants to LAM and Mozambique Expresso (MEX) to prepayment, thereby contributing to the chaos into which the flag airline subsided.
Debt to Airports increased ninefold between 2015 and 2017
LAM has failed to pay Airports of Mozambique the airport overflight and landing fees since 2014. Accounts analysed by @Verdade show that, on 31 December 2015, the of263,347,856 meticais debt of the previous year had more than doubled to 556,602,513 meticais.
In fiscal year 2016, the amount tripled to 1,493,376,581 meticais and, in the following year, even with the reduction of the fleet and consequently of the number of flights, the debt grew by almost one billion meticais to 2,407,168,244 – a significant portion of the company’s 7.6 billion meticais losses.
Among the other suppliers, there is an effort, or pressure with the conditions set of the supply of goods and services, of Mozambique Airlines to amortise current liabilities, namely:
By Adérito CaldeiraSource: A Verdade