Mozambique Government: Selling Stake in Tmcel to Revive Company

• The Mozambican government has established a technical team to negotiate the sale of part of its stake in Tmcel.
• Tmcel's financial difficulties have left the company with $400 million in debt and hindered its ability to pay workers.
• The government wants to attract a new investor by selling part of its stake in Tmcel and finding a strategic partner for the company.

To revive Tmcel, the Mozambican government has established a technical team to negotiate the sale of part of its stake in the company.

The Mozambican government has been grappling with Tmcel's financial difficulties for years, which have left the company with a staggering debt of $400 million in 2023. This debt burden has hindered the company's ability to pay its 1,700 workers, leading to significant cash flow problems. The situation is so dire that former Minister of Transport and Communication Mateus Magala had to intervene to save the company from collapse. He proposed a merger with a multinational telecommunications operator as a solution, which would have involved selling 80% of Tmcel's shares and having the government absorb all its debts. However, this proposal failed to address the core issues, and Tmcel continues to struggle with high debt levels, negative financial results, and cash flow difficulties.

To revive Tmcel, the Mozambican government has established a technical team to negotiate the sale of part of its stake in the company. This move is seen as one of the solutions to revitalize Tmcel and give it more vitality to continue providing critical communications services at the national level. According to Inocencio Impissa, Minister of State Administration and Public Service, the government wants to attract a new investor by selling part of its stake in Tmcel. He emphasized that this is not just about disposing of shares but also about finding a strategic partner for the company.

Tmcel holds a historic position in the Mozambican telecommunications sector, having been formed through the merger of Telecomunicações de Moçambique (TDM) and Moçambique Celular (Mcel) in 2018. Mcel was established in 1997 and was the first company to introduce mobile phone services in Mozambique. The merger aimed to address financial and operational difficulties affecting both state-owned enterprises, but it failed to resolve the core issues. Despite this, Tmcel continues to be a critical player in the Mozambican telecommunications sector.

Lawyers advising clients with stakes in Tmcel or involved in the Mozambican telecommunications sector should monitor developments on the sale of the government's stake, as it may impact their clients' financial obligations and market share.

Source: Original reporting via AIM