Mozambique wants to restructure Ematum’s debt issuance

11 March 2016

The government of Mozambique has proposed the restructuring of bonds guaranteed by the State in the original amount of US$850 million for Mozambican tuna company Ematum, according to financial news agency Bloomberg.

The original loan was placed in 2013 by Credit Suisse and VTB Russia, which have now been hired to seek approval from investors for the restructuring process.

AT the time, the bond issue was promoted to investors as a way of creating a national fishing industry, but most of the money ended up being spent on the acquisition of maritime surveillance ships and war material.

Ahead of a payment that was to be made Friday, the two banks have proposed conversion of bonds maturing in 2020, of which US$697 million has yet to be paid at a coupon of 6.305 percent, into other bonds maturing in 2023.

Data compiled by Bloomberg showed that some major investors holding Ematum bonds include Danske Bank, AllianceBernstein, Aberdeen Asset Managers and ING.

Mozambique’s economy has been affected by two major factors – the fall in international prices of raw materials and the depreciation of the national currency, the metical, against the dollar.

The currency devaluation has made debt, when denominated in dollars, rise from 30 percent at the end of 2014 to nearly 40 percent at the end of 2015, according to the International Monetary Fund (IMF). (macauhub/MZ)