Chad hopes for 'favourable opinion' from Glencore on debt restructuring
Unable to honour debt commitments, authorities in Chad are hoping for a "favourable opinion" from Glencore Plc on restructuring the country's commercial debt under the G20 framework, said Prime Minister Albert Pahimi Padacke.
Unable to honour debt commitments, authorities in Chad are hoping for a "favourable opinion" from Glencore Plc on restructuring the country's commercial debt under the G20 framework, said Prime Minister Albert Pahimi Padacke. Chad officially requested a restructuring of its public debt back in January, the first country to do so under a new framework agreed by Group of 20 (G20) major economies last year. The central African nation's commercial external debt is concentrated in an oil-backed loan from the Swiss commodities trader.
"Glencore represents for Chad today more than 98% of the country's commercial debt," Padacke said during a news conference. "We need to renegotiate things because we have a serious cash flow problem." The International Monetary Fund on Tuesday said it was crucial for Chad to come to comparable terms with its private creditors as it did with public creditors in June. Glencore is Chad's largest private creditor.
Meanwhile a source familiar with the restructuring efforts said Glencore and a handful of Chad's other commercial creditors had formed a committee to represent investors in the negotiations. "The IMF is very keen to get things moving," the source said, adding the committee held a "substantial portion" of the debt.
G20 and Paris Club creditors - including China, France, India and Saudi Arabia - backed Chad's common framework request in mid-April though the process ground temporarily to a halt after then President Idriss Deby was killed in battle just days later. Under the G20 framework, official creditors are meant to agree among themselves on the depth of any concessions on their debt. The terms are then translated into a proposal for private creditors. Both Zambia and Ethiopia have also requested debt overhauls under the G20 plan.
Prime Minister Padacke said authorities have met with Glencore four times to discuss a restructuring deal that would fall within the G20 framework and are awaiting the company's decision. "We are hopeful that the company will agree because all partners are waiting for Glencore's decision," Padacke said. "When you are in debt, the creditor always has the last word."
A Glencore spokesperson declined to comment.
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