UBS Edges Towards Settlement For Mozambique Debt Scandal With $100M Deal

UBS Group AG UBS is discussing with the Mozambican government to potentially forgive up to $100 million in debt, forming part of a resolution related to Credit Suisse's involvement in a financing scandal within the African nation.

Negotiations are still ongoing, with the out-of-court settlement terms being fine-tuned. 

However, it's expected that Mozambique's attorney general could officially announce the settlement as early as next week, Bloomberg reported. 

This potential agreement would help UBS avoid the extensive scrutiny of a 13-week-long London trial scheduled to commence shortly. 

UBS inherited this legal entanglement through its acquisition of Credit Suisse. 

Before its acquisition by UBS in June, Credit Suisse was pivotal in arranging approximately $2 billion in loans for a tuna-fishing fleet and coastal security project, both guaranteed by the Mozambican government.

This massive debt, much of which was kept hidden from the International Monetary Fund and donors, eventually led to a sovereign default, triggering an economic crisis for Mozambique, which is ranked as the world's sixth poorest nation.

The US Department of Justice (DOJ) is heightening its investigation into UBS and Credit Suisse for alleged failures in compliance, which may have allowed Russian clients to circumvent sanctions.

Price Action: UBS shares are up 0.22% at $24.76 on the last check Friday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.