Congo appeals for creditors to snub vulture funds

By Katrina Manson

KINSHASA (Reuters) - Democratic Republic of Congo has urged creditors not to sell its debt to vulture funds as it struggles to pay back loans accrued under a former dictator, a senior civil servant said on Tuesday.

Congo, which has built up more than $11 billion in debt, is hoping 90 percent of it will be cancelled in June, the earliest it could achieve completion point under the Highly Indebted Poor Countries (HIPC) programme, a scheme managed World Bank and International Monetary Fund (IMF).

"We want people to come and talk to us instead of going to vulture funds or spending money trying to track our assets around the world," Kevin Lumbila, head of the country's debt management office and chairman of the committee of the Kinshasa Club of creditors, told Reuters on Tuesday.

The country is seeking to reform its financial management and spending as part of a three-year IMF programme including a $550 million loan granted last year.

The IMF's first review process is due to end on Wednesday.

Several companies not covered by the HIPC deal have threatened to sell what they are owed to vulture funds -- investors who buy deeply discounted sovereign debt then pursue payment at face value through the courts -- as the country failed to pay even 50 percent of its annual debt service requirements last year, and the amount it owes has grown.

The central African country, whose economy is largely dependent on mineral exports, is recovering slowly from the global financial crisis that brought its copper shipments and many debt repayments to a halt.

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