Mozambique’s public companies should seek to pay off debts, says PM

5 May 2017

Public companies Proindicus and Mozambique Asset Management (MAM) should restructure their business models to ensure debt servicing, the Mozambican prime minister said in Maputo on Thursday.

Carlos Agostinho do Rosário said that although the loans were guaranteed by the State, “it is incumbent on the two companies and their respective boards of directors to do everything they can to service the debt, including renegotiating the conditions with the respective creditors.”

The prime minister, speaking in parliament at a government question and answer session, said that converting into sovereign debt, or not, would follow the rules of the respective contracts, after all possibilities of payment have been exhausted by the companies and in line with what is determined by the Attorney General’s Office.

“This is why we say that registering the two guarantees in the General State Accounts does not change their nature, it only serves to register them in public accounting and to ensure control, monitoring and supervision by the Administrative Court,” he said, according to Mozambican state news agency AIM.

Loans in the amount of US$2 billion taken on by the two companies as well as publicly owned tuna company Empresa Moçambicana de Atum (Ematum) is being audited by Kroll Associates UK, which is due to present a report to the Attorney General’s Office on 12 May.

In April 2016, the International Monetary Fund (IMF) and other Mozambican partners decided to freeze the direct support they provided to the State Budget, claiming that the government omitted the real size of the debt and made resumption of that support dependent on international and independent auditing. (macauhub)