Russia’s VTB Capital has sued Mozambique to recover its share of defaulted debts at the heart of the impoverished African nation’s $2bn “tuna bond” scandal, the Financial Times reported. State-owned VTB is demanding repayment of a $535m loan, according to a lawsuit that it filed against the Mozambican government in London. In 2013 and 2014 Mozambique borrowed $1.4bn from VTB and Credit Suisse tied to maritime security projects, alongside a $850m bond it sold to investors for the financing of a tuna-fishing fleet.
Russian state lender VTB has filed a lawsuit in Britain’s High Court against a Mozambican government company it lent hefty sums to as part of a project now at the center of a $2 billion debt scandal, according to an online court filing, Reuters reported. The filing, dated Dec. 23, names as defendants the Mozambique state and Mozambique Asset Management, which took a $535 million loan from VTB as part of a costly project that U.S. authorities say was an elaborate front for a bribery and kickback scheme.
Ncondezi Energy Limited has received support “in principle” for a restructuring of an outstanding US$4.3mln loan plus interest, Proactive reported. The restructuring involves a 12-month extension on existing terms, including 12% annual interest rate and the ability for lenders to swap debt for equity in part or in full at a conversion price of 10p per share. Ncondezi can also nominate to pay the loan off through the issue of shares at a 25% to 30% premium to the 30-day average price. Half of the amount owed is to Ncondzei’s largest shareholder while 45% is held by the board and management.
Bribe allegations leveled in court against a VTB Group executive may complicate the Russian state-owned bank’s attempts to recoup a $535 million loan that’s part of a major debt scandal in Mozambique, Bloomberg News reported. A New York court heard testimony last month that the VTB executive in charge of the deal, Makram Abboud, took $2 million in kickbacks. The bank denies the allegations, made by a former Credit Suisse Group AG banker at a criminal trial in which VTB isn’t a party, and its employee hasn’t been charged with any wrongdoing.
Almost half of frontier market countries are either at high risk of falling into debt distress or are already distressed, the IMF has said, up from zero as recently as 2014, the Financial Times reported. The warning comes as issuance of hard currency frontier market debt is set to hit a record high this year, with $38bn set to be raised, according to the IMF.
The head of Russia’s state bank VTB Andrei Kostin and Mozambique President Filipe Nyusi discussed plans to restructure Maputo’s debt, with the aim to conclude a deal by the year-end. Mozambique needs to restructure a $535 million state-backed loan to Mozambique Asset Management (MAM) arranged by VTB, Reuters reported. The meeting between Kostin and Nyusi was held on Tuesday, a VTB spokeswoman told Reuters. VTB said in a statement on Wednesday that Kostin told Nyusi that the Russian bank would like to agree on the debt restructure plan by the end of this year.
The trial against one of the alleged ringleaders behind $2 billion in fraudulent loans to Mozambique kicked off in New York on Tuesday, the same day citizens of the southern African nation cast judgment at the ballot box on whether their government had done enough to hold accountable officials involved in the secret deals, The Wall Street Journal reported. Mozambique, one of the world’s poorest countries, plunged into a debilitating crisis after the loans were disclosed in 2016, following reporting by The Wall Street Journal.
Creditors holding 99.5% of Mozambique’s Eurobond support its debt restructuring proposal, the country’s government said in a statement on Monday, paving the way for an overhaul of part of its heavy debt burden, Reuters reported. Mozambique said in May it had agreed a restructuring deal “in principle” with the majority of holders of the $727 million notes maturing in 2023 MZ139100352= after a hidden debt scandal in 2016 prompted the International Monetary Fund and foreign donors to cut off support, triggering a currency collapse and a default on the country’s sovereign debt.
Mozambique plans to conclude restructuring its dollar bonds by the end of September, almost three years after first announcing the proposal, Bloomberg News reported. The southeast African nation asked holders of $727 million of debt due 2023 to exchange it for $900 million of notes maturing five years later. That’s mainly because the government expects it will have started earning revenue from Africa’s largest liquefied-natural-gas project, and won’t have difficulty in repaying debts.
Mozambique’s talks with the International Monetary Fund (IMF) are making “encouraging progress,” as the country seeks to restore access to international financing, President Filipe Nyusi said on Wednesday, Reuters reported. Mozambique has been battling to recover from a debt crisis after admitting in 2016 to $1.4 billion (£1.15 billion) of previously undisclosed lending, prompting the IMF to cut off support and triggering a currency collapse and debt default.