Zambia says seeking debt service suspension from Chinese creditors

LUSAKA, Oct 8 (Reuters) - Zambia has in the past few months engaged Chinese creditors to try to secure the suspension of debt service falling due from May 1 to Dec. 31, the ministry of finance said on Thursday.

Africa's number two copper producer has already asked creditors to defer interest payments on three outstanding dollar-denominated bonds amid the coronavirus crisis, which has driven spending and hit copper earnings.

"The Government intends to share the burden equitably across its official and commercial creditors," the ministry of finance said in a written response to questions from bondholders.

Main Chinese creditors include the 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, it said.

"Although it is difficult to pre-judge the outcome of those discussions, Zambia hopes to formalize all debt service suspension agreements before the end of the year."

Central government external debt service on Chinese loans amounts to approximately $426.3 million in 2020 and $428 million in 2021, the ministry said.

Assuming the debt service suspension requests made by the Zambia were all successful, the maximum amount of 2020 debt service suspended and rescheduled would be $225.3 million, it said.

Multilateral creditors would be called on to participate by way of fresh financing rather than debt relief, the ministry of finance said.

Zambia's external debt stood at $11.97 billion at the end of June from $11.48 billion in 2019. [n L5N2GM390]

(Reporting by Chris Mfula; Editing by Alex Richardson)

((chris.mfula@thomsonreuters.com;+260966882814))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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