Mozambique wants to hold meeting of creditors of undeclared debts in 2019

9 November 2018

The Mozambican government intends to bring together the creditors of undeclared loans at a meeting to exchange debt in the first quarter of 2019, the economy and finance minister said on Thursday in Maputo.

Minister Adriano Maleiane, speaking on the sidelines of a conference on the Mozambican economy organised by the Financial Times, said that the meeting of creditors could take place in the first quarter of 2019 and added “we want it to happen as soon as possible.”

The loans involved are those taken out by the companies controlled by the State Information and Security Service, Mozambique Assett Management (US$535 million) and ProIndicus (US$622 million) with the endorsement of the State and whose capital has never been amortized nor the respective interest paid by the country’s government.

The minister, quoted by financial news agency Bloomberg, said he was still convinced that the proposal announced to restructure Mozambique’s single issuance of euro bonds, from US$727 million with amortization in 2023, will be accepted by at least 75% of borrowers which is essential for its approval.

A group of investors representing 60% of the outstanding debt, including Farallon Capital Europe LLP, Greylock Capital Management, LLC and Pharo Management LLC, accepted the proposal to exchange bonds in the amount of US$726.524 million for a new issue of unsecured bonds with a face value of US$900 million, at an interest rate of 5.875% and a maturity of up to 2033.

The proposal includes the payment of 5.0% of the profits to be obtained from natural gas exploration, which is expected to start in 2023, when the project led by Italy’s ENI and ExxonMobil groups in Area 4 starts operating. (macauhub)