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Construction firm wants debt settlement as part of Congo IMF deal

EconomyJul 08, 2019 02:11PM ET
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By Joe Bavier

JOHANNESBURG (Reuters) - Construction firm Commisimpex is calling upon the International Monetary Fund (IMF) to make settlement of its 1.2 billion euro ($1.35 billion) debt dispute with Congo Republic a precondition for a bailout deal, according to a letter seen by Reuters.

Congo's negotiations for an IMF bailout program have dragged on since 2017. The Fund's executive board is due to consider a bailout for Congo on Thursday after the government agreed to restructure a portion of its debt to China.

The IMF had also required Congo - an oil producer and OPEC member - to make progress toward restructuring debt owed to oil trading companies.

Commisimpex, which worked on construction and public works projects from the early 1980s until a Congolese court ordered its liquidation in 2012, said debt stemming from decades-old unpaid bills must also be taken into account.

"The IMF has required the Congo to negotiate with the two other significant groups of creditors with which it is in default. It is patently unfair that the IMF appears to be favoring one set of creditors over others," the letter said.

The letter, dated July 5, was sent by Commisimpex's lawyers and addressed to the IMF's acting Managing Director David Lipton and director of its African department Abebe Selassie.

The IMF did not immediately comment on the letter.

Congo's government spokesman Thierry Moungalla said he would not comment on Commisimpex.

Commisimpex wrote that the IMF should demand that Congo fully and properly record its debt to the company in its public accounts as a precondition for granting the bailout program.

It also said the Fund should demand Congo disclose the payment scenario of that debt under the debt sustainability analysis prepared with IMF staff.

And finally, it said the IMF should require Congo to engage in negotiations with Commisimpex over the payment of the debt.

Commisimpex has pursued Congo in courts in Europe and the United States for two decades, winning a series of court decisions as it has attempted to recoup the debt.

Congo has not paid, however. And in 2012, the country said the firm owed 1.3 billion euros in social security payments built up over 30 years. A Congolese court then ordered the firm into liquidation.

Construction firm wants debt settlement as part of Congo IMF deal

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