Mozambique recently paid back approximately 142 million dollars of a 522 million dollar loan, originally organized by Credit Suisse and now under the UBS Group AG umbrella. The deal is linked to a ship financing scandal that rocked the country and the international banking community around ten years ago.
According to the Bnn news portal on Wednesday, January 17, the settlement payment includes around 96 million dollars in local currency bonds and a further 46 million dollars in cash. Initially, when the out-of-court settlement was announced in October, no details were known. The loan in question had been guaranteed by the Mozambican government, a move that bypassed the International Monetary Fund (IMF).
The website reveals that this loan was not an isolated incident, but part of a larger coastal project worth two billion dollars. “Regrettably, the project was tainted by a corruption and bribery scandal that eventually resulted in several court cases and economic disruption in Mozambique,” the website explains.
The scope of the settlement agreement, the Bnn portal clarifies, mainly covers the substantial part of the debt that Credit Suisse had arranged for the state-owned company ProIndicus. However, it is important to note that VTB Capital remains excluded from the agreement. In the debt split, Credit Suisse held 54%, other commercial creditors held 18% and VTB Capital 28%.
“The bonds issued under the agreement have a maturity period of six years. During the first two years, they have a fixed interest rate, which then fluctuates at the T-bill rate plus 200 basis points,” the website reveals.
To facilitate the cash portion of the agreement, Mozambique used part of a 66 million dollar fee from a canceled natural gas exploration project, as mentioned in an IMF report. This strategic move reflects Mozambique’s commitment to resolving its debt problems and boosting its economic development, despite past controversies.
