LONDON (Reuters) – Creditors holding 99.5% of Mozambique’s Eurobond support its debt restructuring proposal, its finance ministry said, paving the way for an overhaul of part of its heavy debt burden.

Mozambique said in May it had agreed a restructuring deal “in principle” with the majority of holders of the $727 million notes maturing in 2023 MZ139100352= after a hidden debt scandal in 2016 prompted the International Monetary Fund and foreign donors to cut off support, triggering a currency collapse and a default on the country’s sovereign debt.

One of the world’s poorest countries, Mozambique is also trying to restructure other chunks of its debt, which has seen its debt-to-GDP ratio hit 113%, IMF data shows.

It had needed the consent of at least 75% to push through its planned restructuring and in a statement on Monday the finance ministry said it expected settlement to “occur on or around 30 September 2019.”

The restructuring will see the issuance of $900 million of new bonds maturing in 2031.

The amortizing bond comes with an interest rate of 5% up to September 2023 and thereafter 9% until maturity. The proposal also includes up to $40 million in cash payments.

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The Global Group of Mozambique Bondholders (GGMB), representing holdings of around 68% of the defaulted 2023 issue, had supported the proposal.

The GGBM includes funds managed or advised by Farallon Capital Europe LLP, Greylock Capital Management, LLC, Mangart Capital Advisors S.A. and Pharo Management LLC.

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