Mozambican government forecasts average GDP growth of 5.5% over the next 5 years
The $2bn comprises three loans, one of which was converted into a eurobond, and another two that are guaranteed by the state. The government said in 2016 it couldn’t afford to service the eurobond two other loans and that it sought to restructure them. Picture: In file CoM
Mozambique will continue with restructuring talks over $2 billion of defaulted loans, the Ministry of Finance said, even as an international scandal around the debt intensifies.
The $2 billion comprises three loans, one of which was converted into a eurobond, and another two that are guaranteed by the state. Mozambique in November announced an agreement in principal with investors to restructure its $727 million eurobonds that would see debt-holders paid a portion of future revenues from gas projects planned for the north of the country.
“The government is monitoring the latest legal developments nationally and internationally and, while always protecting the interests of the state, will continue with negotiations to the conclusion of the process that has been underway since 2016,” the ministry said in a statement on its website. “These negotiations are very important for the reintegration of Mozambique into the international financial markets and to strengthen the confidence of economic agents.”
Last week, the southeast African nation’s attorney-general filed a legal claim in London against Credit Suisse Group, which arranged the bulk of the debt, including a $622 million loan to state-owned ProIndicus. The claim seeks to revoke the government guarantee for this loan.
Mozambique’s eurobonds due January 2023 rose 0.8% to 87.58 cents on the dollar by 9:37 am in London.
The government announced in 2016 it couldn’t afford to service the eurobond, the ProIndicus debt, as well as the third loan to state-owned Mozambique Asset Management, and that it sought to restructure them. A US indictment in December claimed the tuna-fishing and maritime security projects the loans funded were a front to pay at least $200 million in bribes and kickbacks to people involved.
Three former Credit Suisse workers have been arrested in the UK on warrants from the US, while Mozambique’s ex-finance minister, Manuel Chang, was arrested in South Africa as part of the same case. The US is seeking to extradite all four. In Mozambique, authorities have detained the son of a former president, as well as ex-senior intelligence officials on charges related to the loans.
By Matthew Hill and Borges NhamireSource: Bloomberg
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