One of the world's largest financial services companies is poised to take legal action against the Zimbabwe Government and Bermuda-based satellite communications provider Intelsat in the Bermuda Supreme Court.

According to a report in the Zimbabwe Independent, ING hit Zimbabwe's government with a US$38 million (32 million euro) suit for defaulting on loan repayments.

The bank filed the writs against the Government of Zimbabwe (Republic of Zimbabwe) and Intelsat Ltd. on December 29, 2004.

The Zimbabwe newspaper reports that the suit stems from loans that its Government entered into on July 9 1994, November 28 1994, February 21 1997 and December 5 1997. The loans were advanced to pay for telecommunications services and installations carried out by satellite communications provider Intelsat Ltd.

Since 1999, Zimbabwe has experienced acute shortages of foreign currency and as a result has failed to meet its own critical import essentials and to settle its overdue obligations. With its foreign obligations currently standing at US$45 billion, the International Monetary Fund last week voiced concern over the country's parlous foreign currency situation.

ING law firm Attride, Stirling & Woloniecki would not comment on the case, however the Zimbabwe Independent reported that ING has given its Government three weeks from the date it receives court papers to meet costs and interest on its debts or face legal action here.

In January this year, two other writs were filed against Intelsat and other countries where it conducts business. Fortis Bank (Nederland) NV, has filed a writ against Intelsat Ltd. and The Republic of Tajikistan while First International Merchant Bank Limited has filed against State of (Azerbaijan Republic) and Intelsat Ltd.