Mozambique will continue with restructuring talks over $2bn of defaulted loans, the Ministry of Finance has said, even as an international scandal around the debt intensifies.
The $2bn comprises three loans, one of which was converted into a eurobond, and another two that are guaranteed by the state. Mozambique in November announced an agreement in principle with investors to restructure its $727m eurobonds that would see debt-holders paid a portion of future revenues from gas projects planned for the north of the country.
"The government is monitoring the latest legal developments nationally and internationally and, while always protecting the interests of the state, will continue with negotiations to the conclusion of the process that has been underway since 2016," the ministry said in a statement on its website.
"These negotiations are very important for the reintegration of Mozambique into the international financial markets and to strengthen the confidence of economic agents."
Last week, the southeast African nation’s attorney-general filed a legal claim in London against Credit Suisse Group AG, which arranged the bulk of the debt, including a $622m loan to state-owned ProIndicus. The claim seeks to revoke the government guarantee for this loan.
Mozambique’s eurobonds due January 2023 rose 0.8% to 87.58 cents on the dollar by 11:37.
The government announced in 2016 it couldn’t afford to service the eurobond, the ProIndicus debt, as well as the third loan to state-owned Mozambique Asset Management, and that it sought to restructure them. A US indictment in December claimed the tuna-fishing and maritime security projects the loans funded were a front to pay at least $200m in bribes and kickbacks to people involved.
Three former Credit Suisse workers have been arrested in the UK on warrants from the US, while Mozambique’s ex-finance minister, Manuel Chang, was arrested in South Africa as part of the same case. The US is seeking to extradite all four.
In Mozambique, authorities have detained the son of a former president, as well as ex-senior intelligence officials on charges related to the loans.