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State company MAM unable to repay 1st intallment on Monday: “Restructuring” debt – Finmin
4:12 CAT | 19 May 2016
State company Mozambique Asset Management (MAM), which benefited from state-guaranteed loans contracted outside public accounts, cannot afford the first repayment installment due on Monday 23 May and is seeking to restructure the debt in order to avoid default.
“According to the company, MAM is negotiating to restructure because it does not have sufficient income to pay” the US$178 million (EUR158 million) first installment, Minister of Economy and Finance of Mozambique Adriano Maleiane told National Assembly deputies yesterday.
Maleiane said that the purpose of restructuring MAM’s 2014 US$535 million dollar (474 million euros) state-guaranteed loan is to avoid the company’s obligations falling upon the state.
“It would be hard to find budget money to pay the debt,” Maleiane admitted, adding that the government was satisfied with the company’s efforts and that negotiations with creditors “are going well”.
The Minister said that MAM, which is 98 percent owned by GIPS, a Mozambican State Information and Security Service company, provides services in oil, mining and ports, and has a permit to build a shipyard in Pemba.
The credit maturity is six years at 7.7 percent, with a deferral period of two years, and the first of four annual installments is due next week, but according to Maleiane the company has not yet generated the revenues to repay the debt on its own.
Nevertheless, “this provision will not affect the budget because the company is working with creditors”, Maleiane explained.
Source: Lusa
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