Russia’s VTB bank wants Mozambique to negotiate debt restructuring – Kostin in Davos

Login

Register

http://www.clubofmozambique.com/

Russia’s VTB bank wants Mozambique to negotiate debt restructuring – Kostin in Davos

2:10 CAT | 26 Jan 2018

File photo / Andrey Kostin

The president of the Russian VTB bank said yesterday that he wanted to meet the president of Mozambique “to convince him to negotiate” the repayment of the African country’s debt, while at the same time asserting that there were no irregularities in the ‘hidden loans’.

“We would like to persuade the president and the Mozambican authorities to start negotiations with investors to restructure the debt,” Andrey Kostin told the Bloomberg financial intelligence agency in Davos, Switzerland.

In 2016, Mozambique acknowledged that about US$1.4 billion of government-guaranteed loans were not accounted for in public accounts or reported to donors and international institutions providing financial aid to the country.

Since then, the country has stopped meeting its financial obligations not only on sovereign debt, but also on loans contracted through VTB, among others. It went into default, and saw its rating downgraded by rating agencies and budget support suspended by donors and by the International Monetary Fund (IMF).

In the interview, Kostin said there have been several audits by UK financial authorities, and no evidence of irregularities has been found by VTB, the largest Russian bank.

“I do not think the FBI or any other entity will find any hint of irregularity,” Kostin said.

“If they do, I would really like to be informed because we are really very concerned about the good name of our bank,” he added.

Last summer, VTB criticised the findings of the Kroll consultancy audit report on Mozambique’s ‘hidden debt’, concluding that US$200 million had been paid to arrange lending to public enterprises.

Despite the controversy in Mozambique, and with the retreat from European operations because of sanctions, VTB wanted to expand operations in Africa, Kostin said, and pointed to Angola as an example.

“It is a country with a lot of potential,” he said, following a meeting earlier this year with Angolan president João Lourenço to discuss restructuring the country’s US$1.5 billion debt to the bank, and potential new projects.

Source: Lusa