(Bloomberg) --

Glencore Plc has hired advisers and opened talks with Chad to restructure an oil-for-cash loan worth more than $1 billion for a third time, the commodity trader said in a letter to the International Monetary Fund.

The company has hired Newstate Partners, a boutique advisory firm that specializes in sovereign debt, to represent the Glencore-led syndicate of 16 institutions, according to the letter. The talks come after both the IMF and the World Bank put pressure on Glencore to engage in discussions.

Chad is one of the world’s poorest nations. Its economy suffered from the crash in oil prices in 2020 and it now faces the prospect of a drought that could jeopardize food supplies. The African country, which has little access to global capital markets, tapped Glencore in 2013 and 2014 for nearly $1.85 billion in two deals. After it ran into financial difficulties, Chad and Glencore agreed to restructure the loan twice.

Earlier this year, Chad reached a deal with its official creditors to restructure its external debt, but that agreement can’t proceed until the African country secures a similar deal with Glencore, which is its largest private creditor.

In the letter, seen by Bloomberg News, Glencore said it wanted the concessions it made in 2015 and 2018 when it agreed to restructure the loan “to be taken into account in any discussions regarding” the current talks.

Glencore said in the letter to the IMF that it was engaging in a “constructive and good faith manner” with Chad. The company said it has formed a coordinating committee consisting of five members of the lending group.

Glencore declined to comment. 

The $1 billion-plus oil-for-cash deal has become a thorn in the side for Glencore. Although small in size for the company, the deal has attracted the attention of campaigners who criticized such loans as opaque and harmful to borrowing governments.

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