China calls on Zambia's creditors to take 'fair burden' in debt restructuring

Reuters · 11/13/2023 10:51
China calls on Zambia's creditors to take 'fair burden' in debt restructuring

By Joe Cash and Rachel Savage

- China called on Zambia's other creditors to shoulder a "fair burden" in the country's debt restructuring, after the IMF and official creditors including Beijing "expressed reservations" about a deal Zambia struck with overseas bondholders.

Zambia and a bondholder committee were continuing talks, the copper producer's finance ministry said on Friday, after the official creditor committee co-chaired by China and France and the International Monetary Fund had voiced their doubts over the "last several days".

It did give any details of what these doubts were, but campaign group Debt Justice calculated that bondholders would receive more money back than official creditors if the deal went ahead.

"All creditors should work together and participate in Zambia's debt disposal in accordance with the principle of 'common action and fair burden'," China's Ministry of Foreign Affairs said on Monday in a faxed response to a Reuters question on the reservations about the bondholder deal.

Zambia defaulted three years ago and finally clinched an agreement in principle with a bondholder group in late October, less than two weeks after reaching a restructuring deal with official creditors.

"IMF Staff have been working with the authorities and their advisers to assess the implications of the proposed agreement in principle (AIP)," an IMF spokesperson said in a statement late on Friday.

"Further discussions and modifications are to bring this initial proposal more fully into line with the requirements of the program. We understand that the authorities intend to discuss further with their creditors in the coming days."

(Reporting by Joe Cash and Rachel Savage; Editing by Emelia Sithole-Matarise)