Beijing, 27 March 2024 (TDI): According to Chinese officials on Tuesday, China assures cooperation for Zambia’s debt restructuring. A spokesperson from China’s foreign ministry stated that China remains committed to cooperating with all parties to facilitate Zambia’s debt restructuring.
However, the spokesperson did not affirm whether China supports the proposed agreement that Zambia has reached with its international bondholders.
On Monday, Zambia and a group of bondholders made an announcement, that they have successfully negotiated a new agreement to restructure $3 billion of international bonds.
This proposal has received approval from Zambia’s official creditors, with China being the primary among them.
Unfortunately, Zambia defaulted over three years ago. Therefore, its debt restructuring process has encountered numerous challenges.
In November, the official creditors rejected a previous bond deal. They have cited the lack of comparable debt relief as their reason.
Lin Jian, a spokesperson for China’s Ministry of Foreign Affairs, mentioned the role of China in a routine press conference.
He mentioned that China as co-chair of the Zambian Debt Committee, has collaborated extensively with all relevant parties to facilitate substantial advancements in addressing Zambia’s debt situation.
Furthermore, when asked about China’s response to the latest bondholder deal, Lin Jian answered the question. He stated that China will further coordinate and collaborate with all relevant parties to consistently progress the efforts related to Zambia’s debt management.
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Zambia’s Debt Restructuring
On Monday, Zambia achieved a preliminary debt restructuring agreement with its international bondholders. Significantly, bringing the southern African nation closer to completing a complicated process that has extended for over three years and faced numerous delays.
In October 2023, the government reached a preliminary agreement with a consortium of international investment and pension funds. They were holding $3 billion worth of its sovereign bonds sold on the global capital markets.
However, the agreement faced a significant setback when the government announced that its bilateral “OCC” creditors had rejected a revised deal with its bondholders. The rejection was based because the deal still did not offer sufficient debt relief.
Afterward, Zambian officials visited China in January this year for discussions regarding debt with their Chinese creditors. Also, it includes the Export-Import Bank of China and commercial banks.
Particularly, in March 2024, the government resumed formal discussions with the international bondholder group regarding a new proposal for debt restructuring.
