Sunday 25 August 2019

US firm pulls plug on Irish bond after Angolan legal fight

Building workers on a project for the US company in Africa
Building workers on a project for the US company in Africa
John Mulligan

John Mulligan

A US company that builds affordable homes in sub-Sahara Africa has claimed that "ongoing tortious interference" by Angolan officials in its activities in the country has promoted it to seek the immediate cancellation of a $30m (€26.5m) bond that was traded on the Irish Stock Exchange.

The specialised bond, which was backed by assets in Angola, was issued by a subsidiary of Africa Growth Corporation in 2015 and listed on the Irish Stock Exchange's Global Exchange Market.

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It's understood that just $7m (€6.2m) of the bonds had actually been subscribed to.

Africa Growth Corporation said that when the bond was issued it was the first time a private company issued listed securities based solely on Angolan commercial risk on any significant international stock exchange.

The firm claimed in filings with the US Securities and Exchange Commission that assets it controls in Angola's capital Luanda have been subject to "tortious interference and expropriation by certain governmental individuals".

It said the assets in question include 104 apartments and commercial space in the city.

Africa Growth Corporation intended to use the rental proceeds from the properties to build and develop affordable housing units for low- to middle-income families in Angola. It has claimed that the assets have been unlawfully seized by government officials.

The company told investors that in February this year, that it had entered into an agreement with Angola that was reached after the sides met in Lisbon.

"Official representatives acting on behalf of the Angolan government agreed to make a lump-sum payment of $47.5m (€42m) to the company on or before February 27, 2019, in exchange for the company agreeing to relinquish all of its rights and claims relating to the Angolan real estate assets," it said.

It added that the Angolan government failed to make the payment and that the government has indicated it does not intend to make it.

Last month, Africa Growth Corporation said that it commenced court proceedings in the US against Angola, alleging breach of the settlement agreement and unjust enrichment. It's seeking damages of at least the amount agreed in the settlement.

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