Chad is the first country to request a debt restructuring under a G-20 relief plan.
Keystone / Karel Prinsloo
Switzerland-based commodities trader Glencore has started talks with Chad over the restructuring of the nation’s more than CHF1 billion ($1.1 billion) commercial debt, Reuters news agency reported on Saturday, citing a letter from the company to the International Monetary Fund (IMF).
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The African nation had presented an official debt restructuring request in January. Chad is the first country to do so under a common framework agreement made last year by the Group of 20 to help poorer nations reduce or restructure debt deemed to be unsustainable.
In the letter quoted by Reuters, Glencore said it is engaging the government of Chad in a “constructive and good faith manner”.
“The lender group has held initial meetings with Rothschild & Cie, Chad’s financial advisors, and subsequently with the official creditor committee for Chad in the past week to exchange views on Chad’s request,” the October 15 letter said.
“We welcome the good faith gesture of our partner Glencore to open discussions for the restructuring of our debt, and find a compromise which would be agreeable to both parties,” Chad’s Budget and Finance Minister Tahir Hamid Nguilin told Reuters.
Economic recovery at stake
Chad’s economic recovery, he added, depended on the outcome of the talks with Glencore and a consortium of lenders.
The IMF considers Chad’s total debt of around $3 billion (CHF2.8 billion) unsustainable and conditioned further financial support on its restructuring. Chad has said Glencore represents more than 98% of its commercial debt, most of it oil-for-cash deals contracted in 2013 and 2014, Reuters noted.
The battlefield death of former president Idriss Déby in April threw Chad into political chaos. The coronavirus pandemic, rebel violence in the north, and delays in financial support have taken a heavy toll on the country’s economy.
Chad’s debt has already been restructured twice, in 2015 and 2018.
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