Chad creditors expected to agree phased ‘contingent’ debt relief plan

By Andrea Shalal

TOKYO (Reuters) – Chad’s official collectors are anticipated to agree on Wednesday a debt restructuring technique that features contingencies primarily based on oil costs and participation of personal creditor Glencore, an individual conversant in the plans stated.

Their assembly comes amid stress from the Worldwide Financial Fund and others for decision of Chad’s request from January 2021 for restructuring of its $3 billion in exterior debt below the Group of 20 main economies’ Widespread Framework.

Chad, the primary nation to ask for a debt deal below the framework, struck an preliminary settlement with creditor nations in June 2021, however has struggled to finalize talks with Glencore and different non-public collectors.

Rising oil costs have difficult the image additional, with Glencore arguing that the oil-producing African nation not wants debt reduction. Consultants say, although, the phrases of its debt agreements with Glencore and others will proceed to burden the nation and forestall it from benefiting from the surge in costs.

The nation owes one third of its exterior debt to business collectors, and nearly all of that to Glencore in oil-for-cash offers courting again to 2013 and 2014.

The brand new debt therapy deal would final solely via 2024, when a $571 million IMF financing program expires, and it’ll section in debt reduction primarily based on sure brackets for oil costs. Particulars concerning the particular oil value ranges stipulated within the deal weren’t instantly obtainable.

“The technique is to place out a contingent technique that may give Glencore an incentive to hitch in,” stated the supply, noting that the corporate had not but agreed to the phrases of the deal and it was unclear if it could take part.

If the oil value goes beneath $60 per barrel, then the settlement would name for a further evaluate, that individual stated.

A spokesperson for Glencore declined to remark.

This story refiles to right advisory to: Provides Glencore no remark).

($1 = 643.2500 CFA francs)

(Reporting by Andrea Shalal, Extra reporting by Mahamat Ramadane in N’djamena and Rachel Savage in London; Enhancing by Tomasz Janowski)