Follow along with the video below to see how to install our site as a web app on your home screen.
Note: This feature may not be available in some browsers.
The announcement came at the deadline for a $1.2 billion payment by the state oil company on a maturing bond, which Mr. Maduro said his government would instead deliver on Friday. Speaking on national television, Mr. Maduro said that his government was fighting “a battle for the financial stability and tranquillity of Venezuela.” “We’re going to win this battle,” he vowed. The move is an acknowledgment of how serious the government’s financial problems have become, and throws further into doubt the future of the country, which has been grappling with an economic crisis that has caused dire shortages of food and medicine.
President Nicolás Maduro said his vice president, Tareck El Aissami, left, will lead the restructuring effort.
Mr. Maduro has blamed the crisis in part on the Trump administration, which he has accused of leading an “economic war” against his country through economic sanctions intended to prevent Venezuela’s government from contracting new debt. Given the sanctions, however, it remained unclear how Mr. Maduro intended to restructure the government’s debt. “There’s no way to restructure under existing U.S. sanctions, but the government may be hoping that bond holders now pressure the Trump administration to create an exemption to the sanctions,” said Risa Grais-Targow, director for Latin America at Eurasia Group, a political risk analysis firm.
In a challenge to the Trump administration, Mr. Maduro also named Vice President Tareck El Aisammí to lead the efforts. Mr. El Aisammí has been sanctioned by the United States over allegations that he is a narcotics trafficker, which blocks Americans from doing business with him. There was no grace period for the loan payment due on Thursday, and it remained unclear how investors would react to the failure of the state oil company, Petróleos de Venezuela, or Pdvsa, to make the payment on time.
Venezuela’s state oil company, Petróleos de Venezuela, or Pdvsa, has offered leasing deals to Russian and Chinese companies.
But Diego Ferro, co-chief investment officer at Greylock Capital Management, a New York hedge fund that invests in distressed high-yield bonds, said the restructuring announcement could buy Mr. Maduro some time with bondholders and the Venezuelan people. “People were expecting the payment late anyway,” he said. “As of now they have at least a few months to come up with an offer to put off litigation in the United States. It will depend on what they offer” in terms of payments of principal and interest.
MORE
