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Exclusive: Glencore offers Chad new plan to repay more than $1 billion loan

Reuters  |  LONDON 

By Julia Payne

(Reuters) - Commodities trader has offered a grace period from principal repayments on a more than $1 billion cash-for-crude loan and extended the deadline for full repayment to 2025 from 2022, a letter seen by showed.

The central African nation is under pressure to restructure its debt for a second time after the International Monetary Fund said this year that Chad's external commercial debt, mostly to Glencore, was unsustainable.

The Swiss-based commodities trader and miner, which lent the money before prices began tumbling in mid-2014, said in the letter to Chad's finance minister that it hoped the proposal would satisfy the IMF, which was copied.

held meetings with Chad's delegation in Paris last week to discuss the loan, but no deal was reached.

The letter from Glencore, dated Nov. 14, offered a grace period from principal repayments until the last quarter of 2019, with the interest rate in that period lowered to 4 percent from 6.75 percent.

In addition, the firm offered to release from its call on $1 billion worth of the country's crude during the next three years, the letter said.

The letter, addressed to Finance Minister Christian Georges Diguimbaye, said was "told on Friday night that one more time, our enhanced proposal was not enough and that the Republic of was retracting its latest position once more."

Officials at the Finance Ministry did not immediately respond to requests for comment.

and a consortium of the trading firm's bankers had lent Chad's state firm $1.45 billion in 2014 in exchange for crude.

The deal was restructured in 2015 following the crash in global prices. still owes about $1.3 billion.

Negotiations on the loan, led by Glencore, became fraught last month after decided to divert some crude being marketed by to the country's biggest producer, ExxonMobil.

Hit by drought, a refugee crisis and a costly military campaign against Islamist militant group Boko Haram, has had loans from the IMF, World Bank and African Development Bank, with another $12.9 billion of pledged funding as of September from public and private donors for a 2017-2021 development plan.

(Additional reporting by Madjiarsa Nako in N'Djamena; Editing by Edmund Blair)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, November 15 2017. 20:19 IST