(Bloomberg) — South Africa’s largest lender to farmers has delayed a debt restructuring deal with creditors because of conditions attached to a government bailout, forcing it to repay what it owes to Standard Chartered Plc.Land & Agricultural Development Bank said on Wednesday that a March 31 deadline to reach an agreement won’t be met. The government’s 7 billion rand ($474 million) commitment required “a material change” to previous versions of plans to deliver on the lender’s “development and transformation objective,” it said in response to emailed questions.An agreement would have bought the state-owned bank more time in servicing a facility with Standard Chartered, the lone holdout from the restructuring talks, after a court ordered it pay back 400 million rand in December. Land Bank has now pledged to pay the remaining 352 million rand it owes to Standard Chartered by Thursday.Related: Moody’s Withdraws All Ratings for South Africa’s Land Bank“The bank continues to engage with the rest of its financial creditors to ensure that the interests of all parties are prudently served,” it said.In DefaultLand Bank has been battling to repay its debt and extend credit since a drought caused many of its customers to default on their loans. Last April, the Pretoria-based institution missed a loan repayment that triggered a cross-default in notes issued under a 50 billion-rand bond program.The bank has been in talks with a consortium of creditors for about a year and is negotiating its third proposal to emerge from default.While Standard Chartered’s success in court could spur other creditors to seek similar recourse, only a minority would likely consider this option, according to Jones Gondo, a credit research analyst at Nedbank Ltd.“What should guide creditors now is the approach that will maximize their recovery,” Gondo said.Standard Chartered declined to comment.The London-based bank’s history in South Africa spans 150 years. It divested in 1987 when it sold its stake in Standard Bank Group but returned five years later independently and was granted a full-service banking license in 2003. Its business in the country is now mainly focused on corporate and institutional banking activities, according to its website.Lifeline to FarmersLand Bank extends credit to commercial and emerging black farmers as South Africa aims to redress imbalances from racial-segregation policies ended in 1994. It must now decide how it will manage these dual interests, and quickly.A breakthrough in negotiations with creditors would bode well for confidence as South Africa looks to stabilize other larger state-owned companies such as power utility Eskom Holdings SOC Ltd. The nation’s finances have been strained by support to unprofitable state-owned companies, deep-seated corruption and a wage bill that has jumped 40% over the past 12 years.The manner in which the government is approaching Land Bank, however, is probably related to how much of its capital structure it guarantees, Gondo said.“Eskom is different because of the guarantees,” he said. “In short, the National Treasury behaves differently depending on its contingent risk assessment.”Land Bank expects its eventual agreement with lenders to shape its balance-sheet resizing and other strategic choices, it said.“There are concerns about the time it’s taking to get to a solution, as well as the increased complexity and increased uncertainty introduced” by the most recent version of its proposal, Olga Constantatos, head of credit at Futuregrowth Asset Management, said in a note.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.