Mozambique: Clients owe LAM 17,6 million euros – managers

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Mozambique: Clients owe LAM 17,6 million euros – managers

7:22 CAT | 14 Sep 2023

File photo: Lusa

The South African company called in by Mozambique’s government to manage flag carrier LAM recognised on Thursday that customers owed the airline 1.2 billion meticais (€17.6 million) in June, including Frelimo, the ruling party.

South Africa’s Fly Modern Ark (FMA) was called in to manage LAM in April due to the company’s financial situation, and the board said today, at a meeting with journalists in Maputo, that it had initially found debts totalling 1.7 billion meticais (€24.9 million).

“In the meantime, there have been collections, debt payment plans and reconciliation of accounts,” explained Zita Joaquim, from Fly Modern Ark, at the same meeting, admitting that the debts are from public and private companies, ministries, the armed forces, public institutions and others.

When asked by journalists, Zita Joaquim, the person responsible for financial and accounting administration in the FMA’s management of LAM (Mozambique Airlines) admitted that one company alone, which she did not identify, owed the airline almost 50 million meticais (€733,000).

In the case of the ruling Front for the Liberation of Mozambique (Frelimo), she acknowledged that “it is one of the entities that is off the list of credit flights”, given an initial debt that she put at 22 million meticais (€323,000), of which it has since paid five million meticais (€73,400), while recognising that this is also a problem that the company is responsible for, having allowed these arrears to accumulate.

“But the list of entities is long,” she stressed, admitting that since June, other amounts have been settled, but preferring not to reveal the current amount owed, not least because they have also found proven cases of payments made by clients that were not settled in the company’s accounts, which they are investigating.

The FMA took over management of the state-owned airline in April and recognised that LAM had an estimated debt of around 300 million dollars (€277.7 million), according to data provided at the time.

The ongoing strategy to revitalise the company follows years of operational problems related to a reduced fleet and a lack of investment, with some incidents, not fatal, linked by experts to inefficient aircraft maintenance.

Source: Lusa