Gemcorp Negotiating $500m Loan to Angola

Gemcorp Capital LLP is negotiating a deal with Angola to provide Africa’s biggest oil producer with a $500 million loan, claims a source close to the matter, despite the IMF saying the country had called off talks of financial support.

Gemcorp, a London based investor focusing on emerging markets, is continuing talks to set up a facility for the Angolan Ministry of Finance to help it get dollars for medicine and food, the source said.

At the beginning of the month the IMF said Angola has called off all talks of a bailout loan, resulting in investors selling Angolan assets in response.

However the day after the IMF’s statement, President Jose Eduardo dos Santos said the government has “barely enough” revenue to pay off its debts. Angola has been suffering from the effect of falling oil prices since 2014 so a loan could provide a stable foundation on which to rebuild its economy.

Yields on the country’s $1.5 billion of Eurobonds due in November 2025 jumped 67 basis points on the day of Dos Santos’ comments. The yield rose 3 basis points to 10.61 percent by 11:34 a.m. in Luanda, reported Bloomberg.

Gemcorp was founded two years ago and is headed by Atanas Bostandjiev, a former employee of Goldman Sachs Group and Russia’s VTB Capital. The company is no stranger to lending to Angola, a statement from the Angolan government revealed last year. The company has a 3% stake in Banco Atlantico and provided the government with a $300 million loan in May 2015.

Source: Bloomberg.