Mozambique Wants to Cancel Guarantees on Security Firm’s Debt

FILE - Mozambique's Prime Minister Carlos Agostinho do Rosario talks to reporters in Maputo, April 28, 2016.
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Mozambique is seeking the cancellation of government guarantees on debts run up by state-run security firm Proindicus that helped spark a debt crisis in the country, its prime minister was quoted as saying Wednesday.

Mozambique has a case in London’s High Court against investment bank Credit Suisse and a number of other parties linked with the $2 billion worth of loans, which have sparked investigations in the United States and Mozambique.

Court filings say the case relates to “commercial contracts” but give no further details.

Mozambique state news agency AIM said Prime Minister Carlos Agostinho do Rosario told the Mozambican parliament that Maputo had approached the London court to try to cancel the sovereign guarantee associated with the debt.

The prime minister was answering questions on the debts tabled by an opposition party — in particular, whether Mozambique would continue restructuring the debts and whether it would pay them, the news agency said.

A Credit Suisse spokesman said the bank had not yet been served with a legal complaint.

“When it is served, Credit Suisse will respond in court,” he said in a statement.

Representatives for a group of Mozambique’s bond holders did not immediately respond to emailed requests for comment.

The loans, which were not disclosed to donors like the International Monetary Fund, spurred donors to cut off support when they were disclosed in 2016, triggering a currency collapse and a default on Mozambique’s sovereign debt.

The country is still struggling to recover from the ensuing debt crisis.

Reuters

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