The Zambian government said on Thursday that it is targeting a “win-win situation” as it moves to avert a costly legal debacle in the aftermath of its default on part of a US$3 billion Eurobonds debt.Zambia missed the payment of a US$42.5m coupon on one of its dollar-denominated sovereign bonds in October, prompting the government to requested that bondholders grant it a deferral of interest payments until April 2021 as it struggled with the dual burdens of fighting the COVID-19 pandemic and a limping economy.
The request was turned down, with deadline for payment set for last Friday.
The expiry of the grace period has set the stage for a protracted legal battle between the Zambian authorities and bondholders that could see creditors seizing some of the government’s assets, including mines.
Mines Minister Richard Musukwa told journalists on Thursday that his government was exploring a compromise deal that would avoid the seizure of its mining assets.
“We are very positive that we will get a win-win situation between the bondholders and the government,” Musukwa said.
He said the Zambian authorities would try as much as possible to ensure that the assets are note “auctioned or taken away” by bondholders.
The government holds shares in a number of copper mines.