VTB to release the Government of Mozambique from MAM sovereign guarantee obligations – A Verdade

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VTB to release the Government of Mozambique from MAM sovereign guarantee obligations – A Verdade

2:32 CAT | 28 Aug 2019

Image: A Verdade

The Minister of Economy and Finance has told reporters in Maputo that Russia’s Vnesh Torg Bank (VTB) could release the Mozambican government from the US$535 million sovereign guarantee it issued illegally in 2014, in order “to deal with its borrower, which is MAM” directly.

@Verdade has established that important steps were taken to reach an agreement during President Filipe Nyusi’s recent visit to Russia.

The government hopes that the Russian bank VTB will soon surrender the sovereign guarantee signed by Manuel Chang in 2014, in contravention of the Constitution and budget law.

“The VTB may voluntarily say ‘look, in the midst of all this mess I want to release the government, to directly deal with its tenant, the borrower, which is MAM – we are going to make a rehabilitation and adjustment program, a new business plan and we will move forward’. This is what we would like,” Minister Adriano Maleiane said at a meeting with media editors last Friday (August 23) .

President Filipe Nyusi said, during his visit to the Russian Federation, that steps had been taken regarding debt with the VTB.

According to the financing agreement to which @Verdade initially had access, repayment of the capital, which should have started on 23 May 2016, and had it been honoured, would have been completed on 23 May last, would have cost the company US$644,021, 520 (including interest).

MAM has never made any repayments, and neither has the government, so both are defaulting on the Russian bank, whose interest due alone amounts to US$188 million, plus penalties of US$14 million.

@Verdade has found that negotiations, which the government has always said are easier- because, unlike EMATUM and Proindicus creditors, MAM debt only has to be negotiated with Vnesh Torg Bank, concern turning the commercial debt into bilateral debt, thus moving it to the list of Mozambique’s debts to the Russian state.

Negotiations, which the government in March told the International Monetary Fund were “almost finalised”, also foresee that the Russians will take over Mozambique Asset Management, SA (MAM), a company whose purpose is to operate the infrastructure and facilities necessary to enable Mozambique to provide fixed and mobile vessel maintenance and repair services in Maputo, Beira and Pemba, with multinationals engaged in the oil and gas industry in Mozambique as potential clients.

Also among MAM’s assets are the speedboats acquired from the Privinvest Group, which would enable the Russians to enter the oil and gas multinational security business.

By Adérito Caldeira

Source: A Verdade