Mozambique wants Credit Suisse, Privinvest to help pay bonds

  • Business
  • Wednesday, 04 Sep 2019

MAPUTO: Mozambique wants a UK court to order Swiss lender Credit Suisse Group AG, shipbuilder Privinvest and others to share responsibility for repaying a US$727mil Eurobond the government is restructuring.

Details of the claims, filed in London’s High Court of Justice in February, are laid out in a 102-page document sent to bondholders and seen by Bloomberg. The so-called consent solicitation memorandum and the High Court filings haven’t been made public before.

The government’s request comes as the country enters the final stages of a three-year process to reorganise its debt amid allegations by the US Department of Justice that a series of maritime projects the loans funded were used to pay bribes.

The memorandum seeks approval from investors to switch the Eurobonds due in 2023 into US$900mil of notes maturing from 2028 to 2031. In it, the government tells investors it’s seeking indemnity against any liabilities arising from the existing bonds, the costs of servicing the debt and expenses related to the new issuance.

“Mozambique is claiming indemnification and/or contribution for any liability it may have to the holders of the existing notes and full cost of debt service and associated costs relating to the new bonds to be issued in the current debt-restructuring process, ” the Mozambican government said in the memorandum sent to bondholders.

In addition, the natural gas-rich nation asked the court to nullify a government guarantee on a related US$622mil loan arranged by Credit Suisse for state-owned ProIndicus. It’s also assessing whether it has any rights or obligations regarding a US$535mil loan to Mozambique Asset Management in light of criminal proceedings locally and in the US related to the three debts.

Mozambique’s case is that the loans were all part of a “fraudulent scheme, ” the document shows. — Bloomberg

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