Glencore Opens Talks With Chad to Restructure $1 Billion Loan
Glencore Plc has hired advisers and opened talks with Chad
to restructure an oil-for-cash loan worth more than $1 billion for a third
time, the commodity trader said in a letter to the International Monetary Fund.
The company has hired Newstate Partners, a boutique advisory
firm that specializes in sovereign debt, to represent the Glencore-led
syndicate of 16 institutions, according to the letter. The talks come after
both the IMF and the World Bank put pressure on Glencore to engage in
discussions.
Chad is one of the world’s poorest nations. Its economy
suffered from the crash in oil prices in 2020 and it now faces the prospect of
a drought that could jeopardize food supplies. The African country, which has
little access to global capital markets, tapped Glencore in 2013 and 2014 for
nearly $1.85 billion in two deals. After it ran into financial difficulties,
Chad and Glencore agreed to restructure the loan twice.
Earlier this year, Chad reached a deal with its official
creditors to restructure its external debt, but that agreement can’t proceed
until the African country secures a similar deal with Glencore, which is its
largest private creditor.
In the letter, seen by Bloomberg News, Glencore said it
wanted the concessions it made in 2015 and 2018 when it agreed to restructure
the loan “to be taken into account in any discussions regarding” the current
talks.
Glencore said in the letter to the IMF that it was engaging
in a “constructive and good faith manner” with Chad. The company said it has
formed a coordinating committee consisting of five members of the lending
group.
Glencore declined to comment.
The $1 billion-plus oil-for-cash deal has become a thorn in
the side for Glencore. Although small in size for the company, the deal has
attracted the attention of campaigners who criticized such loans as opaque and
harmful to borrowing governments.
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