LUSAKA, (The Southern African Times) – Zambia’s government said on Tuesday it had adjourned meetings with creditors on a proposal to defer payments on its Eurobonds to Nov. 13 due to a lack of quorum, pushing the copper producer further towards a protracted debt overhaul.
The meetings had been scheduled for Tuesday morning and were expected to gauge support for a delay in interest payments on $3 billion-worth of three outstanding dollar-denominated bonds until April.
Two-thirds of holders of Zambia 2022 and 2024 bonds and three-quarters of its 2027 issue were required to vote.
The prospects for creditors agreeing to the government proposal had been slim. A group representing creditors which hold a blocking stake of Zambian Eurobonds already said in late September that it would reject the government plan.
The group did not immediately respond to a request for comment on Tuesday.
The prospect of a drawn out and messy restructuring has weighed on Zambia’s bonds in recent weeks. Following Tuesday’s announcement, the issues extended declines, trading as much as 0.8 cents lower to change hands between 42 and 46 cents on the dollar.
Zambia already struggled with its mounting debt burden before the coronavirus pandemic roiled global markets.
The country’s external public debt burden amounts to nearly $12 billion, with $3 billion of outstanding Eurobonds, $3.5 billion of bilateral debt, $2.9 billion of other commercial debt and $2.1 billion owed to multilaterals. It owes about $3 billion to China.
In their initial rejection of Zambia’s call for a suspension of Eurobond payments, creditors criticised the government for not saying whether other key lenders such as China had also agreed to a delay.
On Thursday, in a briefing to parliament Zambia’s Finance Minister Bwalya Ng’andu said the government was seeking similar terms from all its creditors.
Wu Peng, director-general of the African Affairs Department at China’s foreign ministry, said on Twitter on Tuesday that he welcomed Zambia’s commitment to treat creditors equally.
“China will support related efforts with all parties, including private creditors,” Peng tweeted