Chad seeks delayed repayments on Glencore-led oil loans

Bloomberg

Chad is seeking to delay repayment of more than $1 billion of Glencore Plc-led oil-for-cash loans after crude prices plunged, the second time the African country has looked to restructure the debt in two years, according to people familiar with the matter.
Glencore has approached the banks that supported the deal to start talks, while Chad has already appointed financial and legal advisers for the discussions, the people said, asking not to be named because the matter is private.
The proposed rescheduling highlights the risk Glencore and the banks have taken in Chad, lending the landlocked country the equivalent of almost 15 percent of its gross domestic product.
The country, with few sources of foreign exchange other than oil, is one of most underdeveloped countries in the world, ranking 184th out of 198 in United Nations Human Development Index.
“Glencore is engaged in constructive discussions with the government and banking partners,” the company said in an emailed statement. The debt negotiations come as the relations between Glencore and Chad cool. Last month, Idriss Deby, Chad’s president, criticized the deal with the commodities-trading house.
“I must admit that the loan obtained from Glencore was an irresponsible step,” he
told French newspaper Le Monde last month. “Because of falling prices, Glencore absorbs almost all of Chad’s oil sales to repay.”
A government spokesman didn’t immediately respond to requests for comment. Glencore and its banks agreed in late 2015 to restructure two oil-for-cash loans with Chad, dating from 2013 and 2014, extending the repayment to seven years from an initial four years. They also agreed to give the country a grace period on repaying the principal that expires this month. Delaying the repayments for a second time may affect banks including Credit Agricole SA, Deutsche Bank AG, Natixis SA and Societe Generale SA, which helped Glencore to raise money for the deals.