An agreement to restructure a US$535 million debt owed by state-owned Mozambique Asset Management (MAM) has been reached, Mozambican newspaper @Verdade reported quoting the Minister of Economy and Finance.
The agreement is focused on a loan taken on in 2014 from Russian state-backed VTB Capital bank and signed by then-Minister of Finance Manuel Chang, but without the mandatory approval of Mozambique’s parliament and exceeding that year’s limit set in the Budget Law.
Minister Adriano Maleiane also said that the sovereign guarantee given to the loan, which was also illegal, to state company ProIndicus to take on a loan of US$622 million will be revoked.
These two companies took on State-backed loans in 2013/2014 and their disclosure by The Wall Street Journal led to support from bilateral and multilateral partners being cut off, including the International Monetary Fund, which suspended a financial aid process.
Maleiane did not explain what restructuring model was agreed upon but the newspaper reported that it would be similar to the one reached with Empresa Moçambicana de Atum (Ematum) bondholders, which reduces the interest payments to be paid until 2023 and from that date, with the revenues from natural gas exploration, make significant amortizations and pay everything off by the mid-2030s.
The minister also said that in relation to ProIndicus, which took on a loan from banks Credit Suisse and VTB Capital, the process of withdrawal of the sovereign guarantee is underway and added, “this is a matter for the Attorney General’s Office. ”
Proindicus, established on 8 January, 2013, was the first of two state-owned companies to take out loans illegally based on state guarantees and is owned by the Ministry of National Defence through its limited liability company Monte Binga and the Social Services of the Information and State Security Service (SISE), via GIPS (Management of Investments, Takes and Services, Ltd). (Macauhub)