Mozam­bique re­lieved over re­jigged Eurobond

Business Day - - INTERNATIONAL COMPANIES - Reuters

Mozam­bique’s agree­ment with the bulk of its cred­i­tors to re­struc­ture a $726.5m Eurobond has good terms and con­di­tions and was “a re­lief for the bud­get”, fi­nance min­is­ter Adri­ano Maleiane said on Thurs­day.

Mozam­bique, which has missed sev­eral re­pay­ments, said on Tues­day it struck an agree­ment with the bulk of its cred­i­tors to re­struc­ture the Eurobond, in­clud­ing ex­tend­ing ma­tu­ri­ties and shar­ing fu­ture rev­enue from off­shore gas projects.

Un­der the deal, Mozam­bique would is­sue a new $900m Eurobond ma­tur­ing in 2033, with a coupon of 5.875% just more than half what the cur­rent out­stand­ing bond was de­signed to pay in in­ter­est.

“It’s a re­lief for the bud­get un­til the time we get ad­di­tional rev­enue,” Maleiane told a busi­ness con­fer­ence in Ma­puto.

Speak­ing to Reuters on the side­lines, the min­is­ter said, “The com­mer­cial terms we reached with the four mem­bers of bond­hold­ers... I think it’s good terms and con­di­tions.”

The four cred­i­tors who had agreed in prin­ci­ple to the re­struc­tur­ing con­trolled around 60% of the 2023 bond. Sup­port from cred­i­tors hold­ing 75% of the bond will be needed to ac­ti­vate col­lec­tive ac­tion clauses.

Maleiane could not com­ment on whether he was con­fi­dent he would get the sup­port needed.

“I can’t say any­thing on be­half the fifth group, but I think they are now in­ter­act­ing and di­gest­ing the pro­posal and will come up with some­thing be­fore or at the meet­ing we have to con­vene in the first quar­ter of 2019.”

Maleiane also said the coun­try was still in dis­cus­sion with cred­i­tors over a $535m loan to Mozam­bique As­set Man­age­ment (MAM) and a $622m fa­cil­ity for ProIndi­cus, a state-owned mar­i­time se­cu­rity com­pany.

“We haven’t reached any agree­ment on the kind of in­stru­ments or time frames,” he said re­fer­ring to talks over re­struc­tur­ing the two loans.

A group of syn­di­cated loan mem­bers who lent money to ProIndi­cus are look­ing for a sim­i­lar re­struc­tur­ing deal that has been agreed with Eurobond hold­ers, a spokesper­son for the lenders said on Wed­nes­day.

Maleiane re­it­er­ated that it is a pri­or­ity for mar­kets to trust Mozam­bique, which has been bat­tling to re­cover from a debt cri­sis, two years af­ter it ac­knowl­edged $1.4bn of pre­vi­ously undis­closed lend­ing.

The dis­clo­sure prompted the IMF and for­eign donors to cut off sup­port to Mozam­bique, trig­ger­ing a cur­rency col­lapse and a de­fault on sov­er­eign debt.

“We are still to an­a­lyse the terms,” Ari Aisen, the IMF’s res­i­dent rep­re­sen­ta­tive in Mozam­bique told the Ma­puto busi­ness con­fer­ence, re­fer­ring to the re­struc­tured Eurobond.

“We are go­ing to con­tinue sup­port­ing Mozam­bique in pur­suit of good gov­er­nance, trans­parency and ac­count­abil­ity, which are part of a frame­work re­quired for a sta­ble macroe­co­nomic en­vi­ron­ment.” /


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