A group of key Mozambique bondholders laid down terms to the embattled government ahead of restructuring talks, calling on it to revoke guarantees on loans taken on by two state-owned companies, Bloomberg News reported. The southern African nation, which defaulted on its only Eurobond in January, should also liquidate the two firms -- ProIndicus and Mozambique Asset Management -- as well as a third, the tuna-fishing company known as Ematum, the so-called Global Group of Mozambique Bondholders said.

The International Monetary Fund had suspicions about Mozambique’s hidden loans almost a year before the government finally admitted it had undisclosed debt, email exchanges between the fund and the government show. The communications, seen by Bloomberg and confirmed by the IMF, show for the first time how the fund sought to uncover the state’s concealment of its borrowings as far back as May 2015, Bloomberg News reported. The government’s eventual disclosure in April 2016 of more than $1 billion of previously hidden loans led the fund and 14 donor countries to freeze aid last year.

Mozambican state companies have failed to account for about a quarter of the proceeds of $2 billion in loans being investigated, according to a report by Kroll LLC that creditors said was needed for debt restructuring talks to start, Bloomberg News reported. “At least $500 million of expenditure of a potentially sensitive nature remains unaudited and unexplained,” Kroll said in the report, commissioned last year by Mozambique’s attorney general. Credit Suisse Group AG and VTB Bank PJSC were paid almost $200 million in fees for arranging the loans, the New York-based investigator said.

A state-run company in Mozambique skipped $134 million in payments on a government-guaranteed loan, the third time this year the southern African nation failed to meet its obligations as a standoff with creditors blocks debt restructuring talks, Bloomberg News reported. Mozambique Asset Management, one of three state-owned companies that took out undisclosed loans worth about $2 billion, failed to make the payment due May 23, Rogerio Nkomo, a spokesman for the Finance Ministry, said by phone.

Mozambique’s parliament ratified a law that provides state guarantees for previously hidden loans of two state-owned companies that sparked a debt crisis in one of the world’s poorest countries, Bloomberg News reported. Lawmakers from the ruling Front for the Liberation of Mozambique approved the state accounts for 2015, which included guarantees for loans worth $1.12 billion that ProIndicus and Mozambique Asset Management took out in the prior two years. Opposition members left the legislature in protest when the vote was taken late Wednesday.

Mozambique increased minimum pay levels for workers including government employees, even as the International Monetary Fund urged the country to keep its wage bill under control amid a debt crisis, Bloomberg News reported. Public workers’ minimum wages will rise by 21 percent, Labor Minister Vitoria Diogo said Tuesday after a cabinet meeting in the capital, Maputo. The increase is higher than that for employees in the private sector including banking, construction and manufacturing, and slightly less than inflation, which accelerated to 21.57 percent in March.

Mozambique’s attorney-general asked the country’s banks to provide details of former President Armando Guebuza’s accounts as part of an audit of $2 billion of previously undisclosed government loans, Bloomberg News reported. The office requested the information about Guebuza and 17 other individuals and an institution for the period January 2012 to December 2016, according to a letter sent to the country’s banks and obtained by Bloomberg.

Mozambique missed a $119 million payment due Tuesday on a loan Credit Suisse Group AG arranged, the second debt repayment the government failed to make in as many months, Bloomberg News reported. The $622 million facility was taken out by state-owned ProIndicus and was supposed to fund the purchase of boats and radar systems to protect the country’s Indian Ocean coastline, where companies including Italy’s Eni SpA and U.S.-based Anadarko Petroleum Corp. have large offshore gas reserves. Credit Suisse on Tuesday declined to comment on its financing of Mozambique.

Mozambique will seek to negotiate a restructuring of part of its debt, its prime minister said on Wednesday. The southern African nation is struggling to repay loans of more than $2 billion that were not approved by parliament or disclosed publicly, Reuters reported. "We will negotiate with the creditors to restructure these debts," said Prime Minister Carlos Agostinho do Rosario, adding that the nation wants to honour its debts "in a balanced way", the state news agency reported.

Mozambique's default on a coupon payment for its dollar-denominated bond last week was "unnecessary" and a step backwards for the country's relationship with the holders of the debt, a group of creditors said in a statement on Monday, Reuters reported. Mozambique announced a week ago it would not make the $59.8 million payment to holders of its 2023 bond due on Jan. 18 because A deteriorating economic and fiscal situation made its ability to repay debt this year extremely limited.