Intelligent news from Mozambique

Privinvest says MAM is ‘satisfied’ with delivery of Mozambique shipyards


Mozambique Asset Management, the company which borrowed $535 million in secret with state guarantees to build and repair boats, has now taken possession of the shipyard in Maputo harbour that it needs in order to start becoming an operating company.

At least three patrol boats supplied by Lebanese group Privinvest are visible behind a yellow wall around 2 metres high, at a shipyard that previously belonged to SOMONAV, a private company whose lease has now run out.

The SOMONAV shipyard in December 2016. Photo © Zitamar News

The SOMONAV shipyard in December 2016. Photo © Zitamar News

MAM’s operations in Maputo were delayed because it had been denied access to the site, Zitamar News reported in June 2016. The chairman of MAM, Antonio Carlos do Rosario, told a parliamentary inquiry in October 2016 that SOMONAV’s lease was due to run out in January 2016 but that it had been “tacitly” extended due to debts owed to it by the Mozambican government.

MAM’s other site, in the northern port city of Pemba, is already operational with the company having taken over an existing naval training facility there.

A spokesman for Privinvest, the Lebanese group which won $2 billion worth of contracts from MAM, ProIndicus, and EMATUM to supply a tuna fishing fleet, naval patrol vessels, shipyards and training and boat-building intellectual property, confirmed for Zitamar that all of MAM’s “contractual sites have now finally been handed over.”

SOMONAV seen from the same angle, May 2017. Photo © Zitamar News

SOMONAV seen from the same angle, May 2017. Photo © Zitamar News

“Our team in Mozambique worked round the clock to get the shipyard up to an appropriate standard,” the spokesman said. “Unfortunately not as many people were trained as there were places available, but the customer certainly was and is satisfied.”

“It is now for the customer to take advantage of its facilities and the intellectual property we have transferred to make and sell the additional boats and maintain oil and gas related vessels as envisaged in the original business plan,” the spokesman said.

An audit conducted by international investigations firm Kroll into how the $2 billion was spent was submitted to Mozambique’s Attorney General this month, in support of that institution’s investigation into potential wrong-doing in the three deals.

MAM failed to make the second $175.5 million repayment, of $133.75m principal and $41.75m interest, on 23 May – a year after missing the first payment. The loan was arranged by Russian bank VTB Capital and by Palomar Capital Advisors, a financial advisory firm within the Privinvest group and led by Andrew Pearse, who helped structure the financing for MAM’s sister company EMATUM while at Swiss bank Credit Suisse.

A finance ministry spokesman told Portuguese news agency Lusa last week that MAM’s debt remains the responsibility of the company, despite the state guarantee – and despite the fact that the finance ministry is, with the advice of international investment bank Lazard, seeking to renegotiate the terms of both the MAM and ProIndicus loans, and of the sovereign bond that replaced the EMATUM financing.

Speaking to the parliamentary inquiry in October 2016, do Rosario said that he was involved, with the Ministry of Finance, in negotiations with a view to converting the ProIndicus and MAM loans into bullet repayments that would be repaid in five to six years.

Do Rosario told the inquiry that MAM “has only one creditor, VTB.” VTB, however, told Reuters in June 2016 that all but $50 million of the MAM facility “has been shared with investors that are active in the region, with the balance of the exposure leaving essentially no room for possible material losses to VTB.”

VTB did not respond to emailed requests for comment on the loan and restructuring last week. A spokesman for Palomar Capital Advisors told Zitamar that such queries should be directed to VTB.

© 2017, Zitamar Ltd. Reproduction and dissemination prohibited without written permission.


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