Mozambique’s Bondholders See `Gaps’ in Restructuring Plans

MAPUTO (Capital Markets in Africa) – A group of key Mozambique bondholders questioned the government’s proposals on restructuring about $2 billion of its foreign debt, saying they lacked “important” information.

The so-called Global Group of Mozambique’s Bondholders, which says it has the backing of investors owning more than 80 percent of the nation’s $727 million of Eurobonds, had earlier dismissed the government’s initial restructuring plan announced March 20 as a “total non-starter.”

The notes, which mature in 2023, rose 2.5 percent to 80.2 cents on the dollar by 10:31 a.m. in London, paring losses this week to 6.1 percent.

The group held a follow-up meeting with Mozambique’s Finance Ministry and its advisers Wednesday in London. The GGMB has previously insisted that any deal should recognize that Eurobond-holders have already provided the government cash-flow relief when they swapped from a previous form of the debt into the current securities in early 2016. They also want preferential treatment to holders of two loans for state companies Mozambique Asset Management and ProIndicus that the government also wants to restructure, as questions have been raised about their legality.

“The GGMB hopes that, with the appropriate adjustments, this initial step will lead to good-faith negotiations to reach a fair and equitable solution,” it said in an emailed statement. “The public presentation has important gaps and thus does not provide a basis of support for the restructuring guidelines included in the presentation.”

Source: Bloomberg Business News