London/Johannesburg — Talks to salvage a tentative $1.7 billion debt restructuring between Congo Republic and energy traders Glencore and Trafigura [TRAFGF.UL] are stuck, sources said, jeopardising an International Monetary Fund bailout for the debt-hobbled nation.
The IMF signed off in July on a $449 million, three-year lending programme to help the central African nation’s ailing economy – but only $45 million has been disbursed with other funds subject to semi-annual reviews.
Those hinge on restructuring the oil-backed loans to the Swiss traders as money the state saves on reduced debt servicing would fill a gap in an overall $2 billion national rescue plan.
More IMF disbursements could help unlock another nearly $900 million in financing from the World Bank, African Development Bank and France who are all backing the rescue programme.
But the IMF said it has held off on submitting a 2019 year-end review to its executive board as it waits for Congo to finalise a deal with the traders.
An IMF spokesman said Congolese authorities had indicated to the institution that they expect restructuring negotiations with the oil traders to be done this quarter.
However, two banking and commodities industry sources familiar with the talks told Reuters an agreement in principle reached over the summer had fallen apart with both sides entrenched in their positions despite ongoing sporadic contact.
Congo wants a partial capital writedown and is meanwhile refusing to allocate cargoes to repay debt, the sources said, while the companies are considering legal action.
A Congo government spokesman did not respond to requests for comment, while spokespeople for Trafigura and Glencore declined to comment.
An IMF spokesman said: “We have not received any formal communication from the authorities regarding the specifics of an agreement in principle, either in the past or more recently.”
Financial advisor Lazard, which is working on behalf of Congo, would not comment on the negotiations.
Another advisor, Parnasse, was not immediately reachable.
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