Mozambican PM announces there is money to pay off 17% of state debt to private sector
The shareholders of Moza Banco have failed to raise the funds necessary to recapitalise the bank. As a result, it is due to be put up for sale so that the government can recoup the money that it put into the bank last year to stop it from going into liquidation.
The central bank, the Bank of Mozambique, was forced to intervene in late September last year when Moza Banco became insolvent (the solvency ratio had fallen below zero). The central bank was required to inject meticas worth over a hundred million US dollars to keep Moza Banco afloat. During this process, the central bank removed the board of directors of Moza Banco and installed a temporary replacement.
The bank’s shareholders had the right to take back control of the bank if they raised the funds to recapitalise it. At a General Assembly of shareholders on 23 January, it was unanimously agreed that there should be a capital increase of 8.17 billion meticais. However, the deadline of 23 March has passed and Moza Banco will now be offered up for sale.
According to a press release from the central bank, “the Bank of Mozambique reminds the public that the stability of the financial system and the strengthening of confidence in the future of Moza Banco are the main objectives of the current recapitalisation process”.
It added, “the Bank of Mozambique assures the market, the clients, and the public that Moza Banco continues to function normally”.
Moza Banco is the fourth largest bank in Mozambique with 48 branches. Speaking in December, the Governor of the Bank of Mozambique, Rogerio Zandamela, explained that if Moza Banco had simply stopped operating on 30 September, it “would have sent a financial tsunami through the system”, provoking a massive run on all the banks.Source: AIM