Maputo - Mozambique missed a $119 million payment due
Tuesday on a loan Credit Suisse Group arranged, the second debt repayment the
government failed to make in as many months.
The $622 million facility was taken out by state-owned
ProIndicus and was supposed to fund the purchase of boats and radar systems to
protect the country’s Indian Ocean coastline, where companies including Italy’s
Eni and US-based Anadarko Petroleum Corporation have large offshore gas
reserves. Credit Suisse on Tuesday declined to comment on its financing of
Mozambique.
“We are in negotiations with the investors,” Finance
Ministry spokesman Rogerio Nkomo said by phone Wednesday from the capital,
Maputo.
Read also: Mozambique admits to $1bn debt hole
Donors and the International Monetary Fund froze aid to
the government after about $1.4 billion of undisclosed loans, including the
ProIndicus facility, were uncovered in April last year. The southeast African
nation said in October it couldn’t afford to service its debt and subsequently
defaulted on a $60 million interest payment on its Eurobonds in January.
In November, Mozambique said it had fallen into $175.5
million of arrears on another loan a state-owned company contracted, which the
government had guaranteed.
The following are more details on Mozambique’s finances
and debt:
The nation expects to receive $350 million in capital
gains tax after Eni sold a 25 percent stake in its gas project to Exxon Mobil,
and part of this could go toward paying arrears, according to Verner Ayukegba,
sub-Saharan Africa analyst at IHS Markit Economics in London. A group of
holders of the $727 million in Eurobonds due 2023 has so far resisted entering
into restructuring negotiations until after the government publishes an audit
into its debt, due for completion at the end of the month. They also want to
first see the outlines of a new IMF program, and have questions over
inter-creditor equity addressed, according to their adviser, Charles Blitzer. While
formal restructuring negotiations haven’t started, Blitzer has been
communicating with government advisers, which include Lazard and White &
Case, he said on Tuesday