President of Seychelles congratulates counterpart in Mozambique on election win
File photo: TVM
Consultant firm Eurasia said that the intervention of the Mozambican parliament in the restructuring of sovereign debt agreed with creditors this month will be one of the main topics for political discussion at the beginning of the next legislative session.
“In Mozambique, the restructuring of sovereign debt is proceeding, following the approval of the terms by the majority of the holders of the bonds, and should be completed by the end of September,” analysts said in a note on several economies in sub-Saharan Africa.
“Opinions are divided on whether restructuring is possible without the consent of parliament, which makes it likely to be a fierce topic of debate when parliamentary work resumes in early 2020,” the Eurasia Group analysts said in the note sent to clients, to which Lusa had access.
An analysis of the main economic and political events also addressed violence in the north of the country but said that the issue is not serious enough to derail the peace process.
“The violence in Mozambique on the eve of the elections on 15 October is unfolding more worryingly than in recent years, including attacks on civilians, but these attacks will not restart the civil war or derail the peace process,” they said.
The holders of Mozambique’s sovereign bonds approved the debt restructuring of $726.5 million (€656 million) that originated in the public company Ematum, the government said on 9 September.
“The proposal was approved by means of a written resolution by bondholders holding 99.5% of the aggregate capital value of the existing notes in debt,” a statement from the economy ministry said, which added that the vote in favour includes the Global Group of Bondholders of Mozambique, which represents 68% of the bonds and had already declared support for the proposal, leaving 75% of the votes in favour for the restructuring to take effect – a target that has been exceeded.
“The written resolution will come into force after the conditions for liquidation have been met and the initial distribution of the rights is expected to take place on 30 September 2019,” the statement added.
The case of hidden debts is related to the guarantees provided by the former Mozambican executive, during the mandates of Armando Guebuza, in favour of loans of around $2.2 billion (€2 billion) for public companies Ematum, MAM and Proindicus.
The Mozambican justice system and the US justice system, which is also investigating the case, consider that part of this money was used to pay bribes to Mozambican and foreign citizens.Source: Lusa
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