Glencore opens talks with Chad to restructure $ 1 billion loan

(Bloomberg) –

Glencore Plc has hired advisers and started talks with Chad to restructure for the third time an oil-to-cash loan worth more than $ 1 billion, the commodities trader said in a letter to the Fund. international monetary policy.

The company hired Newstate Partners, a sovereign debt advisory firm, to represent the syndicate of 16 institutions led by Glencore, according to the letter. The talks come after the IMF and World Bank pressured Glencore to engage in talks.

Chad is one of the poorest countries in the world. Its economy suffered from falling oil prices in 2020 and it now faces the prospect of a drought that could jeopardize the food supply. The African country, which has little access to global capital markets, called on Glencore in 2013 and 2014 for nearly $ 1.85 billion in two deals. After encountering financial difficulties, Chad and Glencore agreed to restructure the loan twice.

Earlier this year, Chad reached an agreement with its official creditors to restructure its external debt, but that deal cannot continue until the African country reaches a similar deal with Glencore, which is its largest private creditor.

In the letter, seen by Bloomberg News, Glencore said he wanted the concessions he made in 2015 and 2018 when he agreed to restructure the loan “to be factored into any discussion about” the talks in question. Classes.

Glencore said in the letter to the IMF that he was engaging “constructively and in good faith” with Chad. The company said it has formed a coordinating committee made up of five members of the loan group.

Glencore declined to comment.

The more than $ 1 billion oil-for-cash deal has become a thorn in the side for Glencore. Although small for the company, the deal caught the attention of activists who criticized the loans as opaque and harmful to borrowing governments.

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