London court to decide on Zambia's debt to "vulture funds": report

A London court is expected to decide on Tuesday how much the Zambian government should pay Donegal International, a Virgin Islands-based company that sued the former for payment of debt it bought from a third party, local newspaper The Post reported Tuesday.

Donegal International paid 3.3 million U.S. dollars for a debt Zambia owed Romania and sued for a 42 million dollars repayment, according to the paper.

A High Court in London ruled in February this year against Zambia's application to dismiss the company's claim but at the same time proposed to end a freeze of Zambian assets secured by the company.

Donegal, run by U.S. businessman Michael Sheehan, is seeking to make a profit of over 30 million dollars from Zambia from a debt it bought in 1999.

The debt was originally owed to Romania for agricultural machinery and services.

It originally had a face value of 15 million dollars but Donegal was claiming that with unpaid interest and other charges, the debt now amounts to more than 42 million dollars.

Zambia has already paid back 2 million dollars, according to the paper.

Donegal successfully sued Zambia in February this year in the Royal Courts of Justice in London and the court is expected to rule how much Zambia should pay.

Donegal and other corporations alike are typically referred to as "vulture funds" for their practice of buying the debts of impoverished countries and making profits.