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Mozambique turned down a restructuring plan by lenders, including Credit Suisse, for one of the state-owned companies at the centre of a hidden-debt crisis, the government’s financial advisers said.
“The proposal from the ProIndicus lenders has been considered by the Mozambique authorities and their advisers,” Lazard Freres SAS said in an emailed statement.
“However, as the lenders have been advised, the proposal does not meet the requirements of the authorities and is not considered a viable basis for a solution.”
Credit Suisse was the lead arranger for a $662m loan to ProIndicus, a state-owned maritime security company, for patrol boats and other infrastructure in 2013. Donors and the International Monetary Fund froze aid to the government after about $1.4bn of undisclosed loans, including the ProIndicus facility, were uncovered in April 2016.
The crisis over hidden debts led to the Southeast African nation defaulting on bond repayments.
Credit Suisse presented a restructuring proposal to the government that includes “significant financial concessions and features a number of provisions that provide ongoing flexibility” for Mozambique, the bank said in a statement.
The government “recently remarked that any solution would need to
guarantee debt sustainability and may include instruments indexed to
other values,” the Swiss bank said, adding that it looks forward to
discussing its proposal with the government and its advisers.
