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Argentina to pay $1.1 billion to 2 creditors in debt litigation

Published 17/02/2016, 22:22
© Reuters. Argentinian President Cristina Fernandez de Kirchner delivers a statement during a signing ceremony with Chinese President Xi Jinping at the Great Hall of the People in Beijing

By Nate Raymond

NEW YORK (Reuters) - Argentina agreed to pay two creditors more than $1.1 billion (£770 million) to resolve claims over defaulted debt, as part of the country's efforts to resolve long-running litigation over its 2002 default, court papers filed on Wednesday showed.

Settlement agreements filed in federal court in Manhattan disclosed that billionaire investor Kenneth Dart's EM Ltd would receive $849.2 million, after agreeing to participate in Argentina's proposal to resolve the litigation for $6.5 billion.

Montreux Partners LP, which along with EM Ltd was among six leading bondholders at the centre of efforts by Argentina to settle the legal battle, will be paid nearly $298.7 million, court papers said.

Their lawyers did not immediately respond to requests for comment.

The papers marked first disclosure of how much each creditor would be paid. Daniel Pollack, a court-appointed mediator, had previously said the two agreements were for "well over $1 billion" without disclosing the breakdown.

Their agreements were first announced on Feb. 5 as Argentina, headed by President Mauricio Macri, proposed paying $6.5 billion to settle litigation stemming from its record $100 billion default in 2002.

The offer represents a 27.5 percent to 30 percent discount for creditors who filed claims of about $9 billion. The settlements are conditioned on the approval of the Argentine Congress and the lifting of injunctions in the litigation.

While the offer was accepted by EM and Montreux, four other leading creditors including Elliott Management's NML Capital Ltd and Aurelius Capital Management LP have not taken it to date.

© Reuters. Argentinian President Cristina Fernandez de Kirchner delivers a statement during a signing ceremony with Chinese President Xi Jinping at the Great Hall of the People in Beijing

Those creditors spurned Argentina's 2005 and 2010 debt restructurings, which resulted in 92 percent of its defaulted debt being swapped and investors being paid less than 30 cents on the dollar.

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