Russian bank sues Mozambique over $2bn default
Publish date: 13 January 2020
Issue Number: 855
Diary: IBA Legalbrief Africa
Russia's VTB has said it has filed a lawsuit in the UK against Mozambique after a state-owned company implicated in a multi-m i l l i o n-dollar bribery scandal defaulted on loan repayments. The bank wants to recover $535m it lent to Mozambique Asset Management (MAM) to fund a shipyard project in 2013. A report on the News24 site notes that MAM defaulted in 2017. 'An agreed restructuring remains our preferred outcome, but after three years of discussions with no tangible progress VTB must now consider all options available to it for a resolution of this outstanding debt,' VTB said in a statement. The Attorney-General's office in Mozambique confirmed that there is a case regarding the debt 'but is still awaiting formal notification of the court'. Between 2013 and 2014, three state-owned companies borrowed about $2bn from Credit Suisse and Russia's VTB Bank to finance maritime surveillance, and buy military and tuna fishing vessels from Privinvest. However, the government only disclosed the debt in 2016 which plunged the country into its worst-ever financial crisis.