Mozambique

Mozambique moved closer to becoming a player on the fast-growing global market for liquefied natural gas, eight years after the first major deep-water discovery there, Bloomberg News reported. The development of hydrocarbon resources is crucial for the southern African country, which has struggled this year to service its debt. While the LNG projects will require tens of billions of dollars in funding and take years to develop, they offer a way to stimulate growth in one of the world’s poorest countries. Exxon Mobil Corp.

Mozambique’s central bank reduced its benchmark lending rate for the sixth consecutive meeting as inflation lingered near a 2015 low and the regulator tries to spur an economy that’s forecast to expand at the slowest pace in 18 years, Bloomberg News reported. The Monetary Policy Committee cut the benchmark interbank rate, known by its Portuguese acronym MIMO and introduced in April 2017, by 75 basis points to 15.75 percent, Banco de Mocambique Governor Rogerio Zandamela told reporters Wednesday in Maputo, the capital. It held the permanent lending facility at 18 percent.

China and India extended the grace periods granted to Mozambique for repayment of more than $2.2 billion of debt, the southern African nation’s Finance Ministry said. The two countries agreed to the extensions in talks last year, Stelia Neta, deputy national director of the ministry, said in an emailed response to questions. In addition, China agreed to forgive $34 million of debt, she said. The restructuring agreements with China and India were first announced by Prime Minister Carlos Agostinho do Rosario last month.

Mozambique is set to meet foreign creditors to discuss almost $2 billion of debt in London Tuesday in what will mark the start of formal restructuring negotiations, more than a year after the southern African nation defaulted, Bloomberg News reported. Investors including Credit Suisse Group AG and UBS Group AG have little idea what will be discussed. Mozambique first missed coupon payments on its $727 million Eurobond due 2023 in January last year and has had almost no contact with the holders since then.

Mozambique will meet its commercial creditors on Tuesday in London to present proposals on how to restructure its huge debts, but Eurobond holders and analysts expressed little confidence on how much progress can be made, Nasdaq.com reported. Shortly after restructuring a Eurobond in 2016, Mozambique's government admitted to $1.4 billion of previously undisclosed loans, much of which was spent on building a state tuna-fishing company and enhancing maritime security.

Mozambique won’t make payments for at least five more years on about $2 billion of loans that led to a default last year, according to the International Monetary Fund, Bloomberg News reported. The government has amassed $710 million of arrears on the debt, most of which it previously hid from the Washington-based lender, according to an Article IV report and an associated Debt Sustainability Analysis to be submitted to the fund’s board March 2. The documents were shown to Bloomberg by two people who declined to be identified because they’ve not been published yet.

Mozambique plans to meet holders of about $2 billion of its debt and outline restructuring proposals in London next month, more than a year after it defaulted, the Ministry of Economy and Finance said. Its Eurobonds gained to the highest since they were sold in April 2016, Bloomberg News reported. “The presentation will provide to holders of the country’s direct and guaranteed external commercial indebtedness an update on recent fiscal and macroeconomic developments in Mozambique,” the ministry said Thursday in an emailed statement.

Lazard Freres SAS is wrapping up talks with the Mozambican government for a planned meeting with creditors, said the bank that’s advising authorities on debt restructuring, Bloomberg News reported. The nation’s Eurobonds gained. “We are finalizing our discussions with the authorities and should be able to inform all creditors very shortly,” Michele Lamarche, managing director at Lazard in Paris, said in reply to emailed questions Thursday.

Mozambique’s state prosecutor on Monday launched legal proceedings against the managers of the state-owned companies at the heart of a multibillion dollar debt scandal, almost two years after the crisis rocked the southern African nation. The office of Mozambique’s attorney-general said in a statement on Monday that it had opened a case at the administrative tribunal to establish “financial responsibility” for the scandal, in which three companies controlled by the country’s intelligence service hid $2bn of state-backed loans, the Financial Times reported.

The head of the three Mozambican state-owned companies at the center of an audit into their previously undisclosed debts was defiant after the probe criticized his leadership, Bloomberg News reported. Antonio do Rosario, in a letter seen by Bloomberg that he authenticated, said Kroll LLC auditors personally attacked him in the report that was published on June 24.