Mozambique pays $142 million to settle "hidden debts" dispute in London Commercial Court, according to IMF

The IMF's report details that the settlement covers about $522 million of the outstanding principal. It includes a cash component ($46 million) and the issuance of national Treasury bonds (6.2 billion meticais over six years, equivalent to $96 million).

The IMF recalls that "in an effort to strengthen governance and transparency and resolve the costly litigations related to loans to public companies," the Mozambican authorities "reached an out-of-court settlement regarding part of Proindicus' debt in October 2023."

The cash component was financed by a one-time fine charged by the government due to the cancellation of a natural gas exploration project. The Treasury bonds issued in 2023 to fund the other component were "consistent with the maximum limit for the issuance of domestic debt under that year's budget law."

The government previously announced that it paid $130 million to financial institutions as part of an out-of-court agreement with Credit Suisse to end a legal dispute in the London Commercial Court.

According to documents presented in court, Mozambique paid amounts ranging from $1 million to $38.2 million to eight institutions, including Banco Internacional de Moçambique (BIM), Banco Comercial e de Investimentos (BCI), Moza Banco, United Bank for Africa, Atlantic Forfaitierungs, and investment funds VR Global Partners, Farallon Capital, and ICE Canyon.

Made public on October 1st, the eve of the trial's commencement in British justice, this agreement primarily involves the Mozambican government and the UBS group, owner of Credit Suisse, the main financier of the state-owned company Proindicus. Proindicus was established to purchase ships and maritime surveillance equipment in 2013.