"UBS in talks to cancel $100m Mozambique debt to end case"

" UBS in talks to cancel $100m Mozambique debt to end case \r\n\r\nUBS Group AG is in talks with the Mozambican government to forgive as much as $100 million of debt as part of a settlement over Credit Suisse\u2019s role in a financing scandal in the African nation, according to people with knowledge of the matter.\r\n\r\nThe parties are still negotiating the terms of the out-of-court deal, one of the people said, declining to be identified because the matter is private. Mozambique\u2019s attorney general may announce the settlement as soon as next week, another person said. It\u2019s not yet clear what, if any other concessions UBS would make in a settlement.\r\n\r\nA deal would avoid the scrutiny of a 13-week long London trial set to start on Monday and help close the chapter for UBS, which inherited the legal battle through its purchase of Credit Suisse. The beleaguered lender, which was only acquired by UBS in June, helped arrange about $2 billion in loans for a tuna-fishing fleet and coastal security project, that the Mozambican government guaranteed.\r\n\r\nThe debt \u2014 most of which was hidden from the International Monetary Fund and donors \u2014 ended in a sovereign default and sparked an economic crisis for the world\u2019s sixth poorest nation. The scandal also prompted court cases spanning New York to London and Mozambique itself, where the former president\u2019s son is serving a 12-year prison sentence for his involvement.\r\n\r\nMozambique alleges Credit Suisse ignored red flags and the corruption of its own bankers in the bond deals struck a decade ago. A settlement would mean that the the London trial would still go ahead with Privinvest, the shipbuilder owner by billionaire Iskandar Safa as a defendant.\r\n\r\nA spokesperson for UBS declined to comment while lawyers for Privinvest didn\u2019t respond to a request for comment.\r\n\r\n Legal Troubles\u00a0 \r\n\r\nThe case is one of the many inherited legal troubles that UBS wants to resolve. Credit Suisse agreed in 2021 to pay almost $475 million to resolve multiple investigations into its role in the scandal. As part of the agreement, a European unit of the bank pleaded guilty to a single charge of conspiracy to commit wire fraud and Credit Suisse also entered into a three-year deferred-prosecution agreement with the US Justice Department.\r\n\r\nUBS\u2019s legal reserves were $6.1 billion in the second quarter, with $3.3 billion for the lender and $2.8 billion for Credit Suisse, according to Bloomberg Intelligence. That still leaves a number of cases to manage, including a growing probe into both Credit Suisse and UBS over suspected compliance failures that allowed Russian clients to evade sanctions.\r\n\r\nThe last-minute proposed settlement with Mozambique follows a October 2021 agreement with regulators where Credit Suisse agreed to forgive $200 million of debt owed by Mozambique. The Wall Street Journal reported late Thursday on talks focused on the $100 million in loan forgiveness."

"UBS in talks to cancel $100m Mozambique debt to end case"

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