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Outlook for Mozambique restructuring better next year - diplomat
July 13, 2017 / 12:27 PM / 5 months ago

Outlook for Mozambique restructuring better next year - diplomat

MOSCOW, July 13 (Reuters) - The outlook for a restructuring of $2 billion of controversial borrowing by Mozambique state firms will be better next year as the southern African country receives more earnings from its energy resources, a senior Mozambican diplomat said.

An International Monetary Fund (IMF) delegation has landed in Mozambique to follow up on a damning external audit into loans which were not cleared through parliament.

The discovery of the loans prompted the IMF and Western donors to end budgetary support for Mozambique, leading to a collapse of its currency and defaults on its debt.

Creditors including Russian bank VTB and Credit Suisse, which arranged the controversial $2 billion loans, are waiting for restructuring to start.

“It is important that we restructure Mozambique’s debt to VTB. I think that next year things will be different,” Mario Saraiva Ngwenya, Mozambique’s ambassador to Russia, told Reuters.

“There is now light at the end of the tunnel, we have started to get some money from some oil and gas contracts.”

Mozambique has large natural gas reserves, in which international energy firms have bought stakes.

Earlier this year Italy’s Eni signed an $8 billion deal to develop a gas field off the coast of Mozambique.

VTB said on Thursday it was open to dialogue with Mozambican officials with the aim of reaching a settlement that met conditions imposed by the IMF for debt sustainability.

“We have proposed several different restructuring options to the Government of Mozambique. Currently the involved parties are waiting for the IMF debt sustainability assessment, this will allow for the restructuring talks to fully begin,” VTB said in a statement.

The Mozambican ambassador to Moscow said there had been preliminary talks between officials from Mozambique’s finance ministry and VTB Capital, the investment-banking arm of VTB, but that negotiations were yet to begin in earnest. (Reporting by Alexander Winning; Editing by Toby Chopra)

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