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Russia restructures Venezuelan debt, PDVSA loans not included

Published 15/11/2017, 13:45
© Reuters.  Russia restructures Venezuelan debt, PDVSA loans not included
IMOEX
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By Jack Stubbs, Polina Nikolskaya and Darya Korsunskaya

MOSCOW (Reuters) - Russia and Venezuela signed a debt restructuring deal on Wednesday allowing Caracas to make "minimal" payments to Moscow in the next six years to help it meet obligations to other creditors, the Russian Finance Ministry said.

Under the deal, Venezuela will pay Russia back a total of $3.15 billion (£2.3 billion) over a 10-year period, the ministry said.

S&P Global Ratings declared Venezuela in selective default on Tuesday after the South American country failed to make $200 million in coupon payments on its global bonds due in 2019 and 2024 within a 30-day grace period.

Venezuela has public external debts of about $150 billion, including $45 billion in government debt and another $45 billion of the state oil company PDVSA's debt, according to the International Institute of Finance, an adviser to a group of U.S. and international holders of Venezuelan debt.

The Russian Finance Ministry said on Wednesday the restructuring should free up more funds to allow Venezuela to develop its economy and "will improve the debtor's payment ability, increasing the chances of all creditors to get their loans back."

The ministry statement did not mention PDVSA debt to Rosneft, last estimated by the Russian oil company at $6 billion in August.

Asked whether PDVSA debt was part of Wednesday's deal, Venezuelan Economy and Finance Minister Simon Zerpa told a briefing in Moscow that no corporate debt was included in the new deal, which was purely between the two governments.

Pavel Fyodorov, one of Rosneft's first vice presidents, said on Tuesday that Venezuela was paying its debt in tranches of "hundreds of million of dollars," and that his company had no plans to lend any more money to the country.

Rosneft declined further comment on Wednesday. The company's shares were down 3.3 percent in mid-day trading in Moscow while the overall MICEX index (MCX) was down by 1.1 percent.

Venezuela has borrowed billions of dollars from Russia and China over the years, primarily through oil-for-loan deals that have crimped the country's hard currency revenue by requiring oil shipments to be used to service those loans.

Venezuela has not requested any help from Russia beyond a debt restructuring deal, Kremlin spokesman Dmitry Peskov told reporters on Wednesday. [nR4N1NF01L]

Russia's Audit Chamber said in June that Venezuela had not fulfilled its obligations under an intergovernmental protocol from September 2016. That agreement was an amendment to a Russian loan granted in December 2011.

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