Angolan flagship airline TAAG has been in a state of technical bankruptcy for three years, according to the carrier’s annual report and accounts for 2017, quoted on Monday by Angolan newspaper Expansão.
The report points to the need for a capital increase by the sole shareholder, the Angolan State, to “solve the situation in which the company finds itself.”
The need for capitalisation and financial restructuring of the company, which halved year-on-year losses from 15.1 billion kwanzas (US$48 million) in 2016 to 7.7 billion kwanzas in 2017, is also highlighted by the external auditor.
In the report, Ernst & Young (EY) concludes that “circumstances indicate a significant uncertainty that may call into question the company’s ability to continue its normal course of business.”
The external auditor noted that TAAG, because it is “a 100% public company and a public service,” needs the “support of the Angolan State to fulfill the mission and objectives for which it was created.”
And it recalled that in 2017, as in previous years, the company made “diligent efforts to demonstrate to the relevant entities the critical need for capital infusion,” proposing the conversion of the amounts to be paid to the State in capital.
The Fiscal Council of TAAG agreed with the external auditor and restated the need for the “shareholder to take urgent action,” with a view to “capitalisation of the company”, which posted negative equity for the third consecutive year. (macauhub)