- African nation is working ‘very diligently’ with VTB Bank
- State-owned company faced May 23 deadline to pay $178 million
Mozambique and VTB Bank PJSC of Russia are close to agreeing on a restructuring of a loan to a state-owned company in the southeast African nation and the $178 million interest payment that was due on May 23, a finance ministry spokesman said.
“We are working very diligently with VTB to pay the outstanding interest and complete the agreed restructuring” of the loan to state-owned Mozambique Asset Management, or MAM, finance ministry spokesman Rogerio Nkomo said Sunday in response to e-mailed questions. “Both are expected to happen in the next few days.”
The cash-strapped nation is facing demands from donors to disclose the state of finances, including listing all existing and planned debt. A letter from the so-called Group of 14 donors, released this month, requested that the government reveal the shareholding structure of MAM and a second state-owned company, Proindicus, which was lent $622 million in 2013.
S&P Global Ratings, which estimates Mozambique’s net general debt at 90 percent of gross domestic product this year, and Fitch Ratings this month lowered the country’s credit assessment, saying the nation was at a greater risk of default.
The country, which is trying to develop gas fields that the government believes may make it the third-biggest exporter of liquefied natural gas, owes foreign investors $9.85 billion, Finance Minister Adriano Maleiane told lawmakers this month. Mozambique held $1.8 billion in foreign exchange in April.
The yields on Mozambique’s bonds due January 2023 closed at a record 17.14 percent on May 27, according to data compiled by Bloomberg. The metical has sunk 18 percent this year after depreciating 32 percent in 2015.