Mozambique is closing in on an investor-friendly debt reprofiling of beleaguered tuna company Empresa Mocambicana de Atum SA (Ematum), reports Reuters.
Holders of debt issued by Mozambique’s state tuna-fishing company have said they expect to receive coupon and amortization payments ahead of meetings, in which the government will outline more details of a proposed swap.
Last week, the government launched an offer to swap the $697 million of debt that is still outstanding on the issue after Friday’s repayment.
“Mozambique is expected to pay coupons and amortisation on (Ematum) bonds as a condition to proceed with what we expect to be an investor friendly reprofiling of its debt,” said Greg Saichin, CIO global emerging markets at Allianz Global Investors.
Under the offer, the old bonds issued by Mozambique Ematum Finance 2020 B.V. under an amortising structure, and maturing in 2020, would be exchanged for new bullet bonds issued directly by the government and set to mature in January 2023.
The bond was initially presented in 2013 as funding for “tuna fishing and related infrastructure” although it quickly became apparent much of the cash was for maritime surveillance and security.
Holders of the bonds have been invited to meet in London and New York this week with a delegation from Mozambique, including the finance minister and representatives from the treasury and major local banks.
“We need to see what conditions they offer and we have yet to hear about the coupon,” said another London-based fund manager. “They are hoping for a friendly exchange.”
Mozambique is set to publish more details of its exchange offer, including coupon and pricing, on March 17.
According to Danske Bank, Ematum’s biggest bondholder, the south African nation could convert the amortizing notes due in September 2020 into an interest-only sovereign bond with a longer maturity.