Mozambique: Task force created to assess reduced external funding in health
Just in: Mozambique rejects Credit Suisse debt restructure proposal – Bloomberg
2:01 CAT | 17 Oct 2018
File photo: Lusa
Mozambique turned down a restructuring plan by lenders, including Credit Suisse Group AG, for one of the state-owned companies at the center of a hidden-debt crisis, the government’s financial advisers said.
“The proposal from the ProIndicus lenders has been considered by the Mozambique authorities and their advisers,” Lazard Freres SAS said in an emailed statement. “However, as the lenders have been advised, the proposal does not meet the requirements of the authorities and is not considered a viable basis for a solution.”
Credit Suisse was the lead arranger for a $662 million loan to ProIndicus, a state-owned maritime-security company, for patrol boats and other infrastructure in 2013. Russia’s VTB Bank PJSC arranged $118 million of the debt. Donors and the International Monetary Fund froze aid to the government after about $1.4 billion of undisclosed loans, including the ProIndicus facility, were uncovered in April 2016.
The crisis over hidden debts led to the southeast African nation defaulting on bond repayments.
Restructuring Proposal
A group representing a majority of the holders of Mozambique’s $727 million of Eurobonds presented a restructuring proposal for those instruments to the government earlier this year. Under the plan, bondholders would get access to government revenue from the multibillion-dollar gas projects companies including Anadarko Petroleum Corp. and Exxon Mobil Corp. plan to develop in the north of the country.
Lazard didn’t say whether the government had accepted or rejected this proposal and the bondholders’ legal adviser declined to comment.
Credit Suisse presented a restructuring proposal to the government that includes “significant financial concessions and features a number of provisions that provide ongoing flexibility” for Mozambique, the bank said in a statement.
The government “recently remarked that any solution would need to guarantee debt sustainability and may include instruments indexed to other values,” the Swiss bank said, adding that it looks forward to discussing its proposal with the government and its advisers.
Mozambique’s Eurobonds due 2023 gained 0.9 percent to 84.18 cents on the dollar in London on Tuesday.
Source: Bloomberg
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