Chad wants to renegotiate debt with private creditors

KIGALI, Rwanda

Chad needs to renegotiate its public debt because of “a serious cash-flow problem,” its prime minister said Thursday after the International Monetary Fund (IMF) assessed its debt as “unsustainable.”

The IMF said Tuesday it was crucial for Chad to reach comparable terms on debt restructuring with private creditors, with the biggest being Glencore Plc.

Prime Minister Albert Pahimi Padacke said at a news conference in the capital, Ndjamena, that authorities met Glencore four times to discuss a restructuring deal under the G20 framework but have yet to receive a response.

“Glencore represents for Chad today more than 98% of the country's commercial debt. We need to renegotiate things because we have a serious cash-flow problem,” he said. “We are hopeful that the company will agree because all partners are waiting for Glencore's decision.”

Chad reportedly owes Glencore and its syndicate of lenders more than $1 billion, with Glencore’s portion worth $347 million.

The West African country’s economic and financing woes are attributed to the coronavirus pandemic, an oil slump, climate change and militant attacks.

Padacke said Chad, which depends mainly on oil resources, is suffering from the fall in oil prices on the international market.

Chad requested a restructuring of its public debt in January under a new framework agreed by the G20 last year,

It is one of three of 73 eligible countries that are seeking relief under the framework, designed to help poor countries struggling to repay their debt because of the pandemic to either reschedule or restructure their external obligations.

According to the IMF, Glencore, backed by banks, loaned Chad and state-run Societe des Hydrocarbures du Tchad nearly $2 billion between 2013 and 2014 to plug a budget deficit and buy a stake in an oil project.