INTERNATIONAL – Holders of Mozambique’s state-guaranteed loans ear-marked for restructuring will not receive any instruments allowing them a share in future revenues from offshore gas projects, unlike Eurobond creditors, the country’s legal counsel said.
Mozambique’s government is battling to overhaul its suffocating debt burden after admitting in 2016 to $1.4 billion (R19bn) of previously undisclosed loans, which prompted the International Monetary Fund and foreign donors to cut off support, triggering a currency collapse and a debt default.
Maputo needs to restructure a $535 million state-backed loan to Mozambique Asset Management (MAM) arranged by Russian lender VTB and a similar $622 million facility for maritime security projects at ProIndicus arranged by Credit Suisse. Also due for overhaul is a $726.5 million Eurobond.
“My expectation is that there will be similarities between the deals that the guaranteed lenders get - whether it is ProIndicus or MAM,” Ian Clark, a partner at White & Case, told Reuters.
However, the deal envisaged with holders of the guaranteed loans would differ from the one offered to Eurobond holders, he said. Mozambique announced in November it had reached a deal with the bulk of Eurobond creditors which included extending maturities and sharing future revenues from huge offshore gas projects.