Japan and Iran have agreed in principle to refinance $500 million of $2.6 billion in debts owed by the Persian Gulf country to private Japanese companies, to help strengthen bilateral economic relations, government and industry sources said Tuesday.
The sources said the basic agreement was reached after hectic negotiations between the Iranian government and a consortium of 18 major Japanese trading firms and oil wholesaling companies. Tomen Corp. acted as a representative of the Japanese private-sector creditors' group.
Refinancing is effectively tantamount to debt rescheduling. Under the Iranian debt-refinancing scheme agreed upon in principle, a "special purpose company" will be set up as early as April by the private-sector Japanese creditors, according to the sources.