Mozambique cannot pay bondholders

The Ministry of Economy and Finance on 16 January confirmed that Mozambique would not pay the interest on bonds initially issued by the Mozambican Tuna Company (Ematum) and which fell due on 18 January.

A statement from the Ministry addressed to the bondholders, pointed out that the Minister of Economy and Finance, Adriano Maleiane, made the country’s financial situation clear in a presentation given on 25 October, and reiterated in a statement on 14 November.

“The deteriorating macroeconomic and fiscal situation of the Republic has severely affected the country’s public finances”, says the latest statement. “The resulting debt payment capacity of the Republic is therefore extremely limited in 2017, and does not allow the Republic room to make the scheduled interest payment”.

The Ministry insists that it is “committed to engaging in a collaborative process with the Republic’s external commercial creditors, consistent with international best practices, with the objective of finding a solution within the parameters of the IMF’s debt sustainability framework for low-income countries”.

Once again, the Ministry suggested that the bondholders should liaise with the government’s legal and financial advisors, respectively the London law firm, White & Case LLP and Lazard Frères, which claims to be the world’s leading financial advisory and asset management firm.