LUSAKA (The Business Telegraph):- According to a press release of Q&A session between Zambia’s MinFin and dollar bondholders published on the London Stock Exchange, Zambia, Africa’s red metal hotspot through to 2021 owes China $854.3million in debt service.
“Central Government external debt service on Chinese loans amounts to approx. USD 426.3m in 2020 and USD 428m in 2021. Assuming the debt service suspension requests made by the Zambian Government are all successful, the maximum amount of 2020 debt service suspended and rescheduled would be USD 225.3m (debt service on Chinese entities from May to December). In addition, there are ongoing discussions to include arrears that have accrued up to end-April 2020 (approx. USD201m) to be included in the Debt Service Suspension Initiative,” The press release carried.
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The Q&A follows a presentation to investors and bondholders by Zambia’s Minister of Finance Dr. Bwalya Ng’andu on 29 September. This presentation was made to suade bondholders to nod the solicitation request for 6 months coupon freeze on its dollar bonds to 14 April of next year.
Zambia owes Export Import Bank of China, China Development Bank, the Industrial and Commercial Bank of China and a few other commercial entities including the Bank of China. Ongoing negotiations have been focused mainly on agreeing debt service deferment in the context of the DSSI. Considering the Government’s current liquidity challenges, negotiations have also aimed at deferment of arrears accrued before the DSSI period.
The copper producer has submitted a bilateral request to the Chinese Government for debt service deferment on Government to Government (G2G) facilities. The Chinese Government has since agreed to grant DSSI for all Government to Government (G2G) facilities and all Concessional facilities as per the G20 guidelines of one-year grace period and three years repayment. As for the commercial facilities, Government has been engaging the Banks and SINOSURE bilaterally on the insured loan facilities. These discussions are still underway pending agreement on deferment of interest payments and accumulated arrears.
The Kwacha Arbitrageur