Congo Republic’s senate on Monday voted to restructure some of its debt with China, a move that the International Monetary Fund has said was necessary to unlock financial support, the finance ministry said. Negotiations over a bailout for the oil-dependant economy have dragged on since 2017, as Congolese authorities failed to convince the IMF they were doing enough to control the national debt or tackle corruption, Reuters reported.
Mozambique’s restructuring discussions with Russian lender VTB over a loan to the state-owned Mozambique Asset Management (MAM) are in the final stretch, the International Monetary Fund (IMF) said in its latest country report, Reuters reported. The fund also said the devastation from Cyclone Idai which killed more than 1,000 people across Mozambique, Zimbabwe and Malawi in March, had severely hit agricultural production and disrupted transport, slashing growth projections by half for this year.
Zimbabwe’s central bank has secured a $500 million loan from unspecified international banks to support interbank currency trading from Monday and ease a dollar crunch that has brought fuel and medicine shortages, Governor John Mangudya said, Reuters reported. The central bank introduced a new local currency in February, the RTGS dollar, and launched an interbank trading platform where businesses and individuals could buy and sell U.S. dollars. But dollars have been scarce on the official market, where a U.S. dollar fetches 3.4 RTGS dollars compared to 6.3 RTGS dollars on the black market.
Yields on Eskom Holdings SOC Ltd.’s dollar bonds traded near one-year lows while those on government debt jumped amid renewed speculation that the South African government may take over the cash-strapped electricity company’s debt, Bloomberg News reported. Moody’s Investors Service now includes the power producer’s government-guaranteed debt in its assessment of the nation’s fiscal situation because the utility can’t service its obligations without the state’s backing, it said in an emailed report Wednesday.
South Africa’s Public Investment Corp., whose 30% stake in Lonmin Plc is enough to block the miner’s planned takeover by Sibanye Gold Ltd., is concerned that the value of the all-share deal has been eroded, according to a person familiar with the matter, Bloomberg News reported. The state-owned PIC is troubled by the drop in Sibanye’s stock since the deal was announced in December 2017 as the company battled to cut debt, said the person, who asked not to be identified as the deliberations are private.
PBC Ltd., Ghana’s biggest cocoa buyer, seeks to raise $100 million from international banks to help pay off cedi debt that matured late December, Bloomberg News reported. The transaction, handled by an Accra-based advisory firm, should be completed before the start of the main harvest on Oct. 1, said Deputy Chief Executive Officer Kojo Safo. The company has approached the state-run pension fund and the government, who together own a 75 percent stake in PBC, to provide guarantees for the loans that are likely to have maturities of five to six years, he said.
Zambia, which the International Monetary Fund has warned is at high risk of debt distress, contracted an additional $2.6 billion of new external loans last year, according to the Finance Ministry, Bloomberg News reported. If the funds are disbursed, they’ll increase the southern African nation’s external debt to $12.7 billion, from $10.1 billion at the end of 2018. The new loans suggest the government is too complacent about rapidly increasing debt risks, Gregory Smith, fixed-income analyst at Renaissance Capital in London, said by email.
Steinhoff International Holdings NV is living on the edge. The global retailer at the center of South Africa’s biggest corporate scandal cut the value of its assets by 15.3 billion euros ($17 billion) because of accounting irregularities, Bloomberg News reported. The company also warned it won’t be able to keep going longer than 12 months unless its debt is reorganized and it skirts mounting lawsuits and possible regulatory fines. At risk is a business with 120,000 employees across chains including Mattress Firm in the U.S., Conforama in France, Poundland in the U.K.
Mozambique reached an agreement in principle with Russia’s VTB Bank PJSC on the restructuring of a loan that forms part of the nation’s $2 billion hidden-debt scandal, according to the International Monetary Fund, Bloomberg News reported. The southeast African nation has sought to restructure the loans since 2016, when the government admitted to the IMF it had contracted the bulk of them in secret, breaching an obligation to notify the Washington-based lender of any new credits. The U.S. Department of Justice and the Mozambican authorities are investigating the loans.
Credit Suisse Group AG’s recent shareholder meeting took an awkward turn when a Mozambican activist questioned Chairman Urs Rohner over the bank’s role in fraudulent deals that saddled her country with $2 billion of debt, The Wall Street Journal reported. The confrontation halfway through Friday’s meeting was the latest example of the rising international pressure on Credit Suisse to forgive loans it made to Mozambican state-owned companies engaged in an alleged complex fraud, and potentially, to pay damages to victims.
