Mozambique Sets Up Special-Purpose Vehicle for $130M Rescue of National Airline LAM
Mozambique will establish a special-purpose vehicle (SPV) to enable a consortium of state-owned companies to acquire shares in its struggling flag carrier, Linhas Aéreas de Moçambique (LAM), the cabinet announced in a statement.
The new entity will be jointly owned by hydropower producer Hidroeléctrica de Cahora Bassa, railway operator Caminhos de Ferro de Moçambique, and insurer Empresa Moçambicana de Seguros, according to Bloomberg.
In February, the government confirmed that the consortium would acquire 91% of LAM for $130 million, with funds earmarked for the purchase of eight new aircraft and a wider restructuring plan. To support the turnaround, Mozambique appointed former Air Serbia CEO Dane Kondic in May to lead the airline’s overhaul.
LAM has struggled for more than a decade, at times operating with as few as two aircraft. The airline’s financial crisis was deepened by corruption scandals linked to service acquisitions, leaving it with debt exceeding $230 million, according to state news agency AIM.
In 2023, LAM hired South African consultancy Fly Modern Ark to stabilize its finances, but the contract was terminated the following year.
A fiscal risk report released last week by the Ministry of Finance classified LAM as a “high-risk” entity whose survival depends on direct state intervention.
