Venezuela’s PDVSA delays $121 million interest payment: investors

FAN Editor
The corporate logo of the state oil company PDVSA is pictured at a gas station in Caracas
The corporate logo of the state oil company PDVSA is pictured at a gas station in Caracas, Venezuela, October 10, 2017. Picture taken October 10, 2017. REUTERS/Ricardo Moraes

October 13, 2017

By Corina Pons

CARACAS (Reuters) – The payment of $121 million in interest on debt owed by Venezuela’s state-owned oil company PDVSA [PDVSA.UL], which had been scheduled for Oct. 12, has been delayed, four investors told Reuters on Friday.

The delay comes ahead of a heavy debt payment period for the oil company, which is due to pay debt service of $2.9 billion before the end of November, according to a local consulting firm.

By missing the interest payment on Thursday, the oil company is entering a grace period with lenders of 30 days rather than defaulting.

“We have not yet seen the funds,” said an executive who handles Venezuelan debt and who asked not to be named.

“We have been told they have the money, but there are problems transferring the money into the main account because they are impacted by the sanctions,” said another local operator who invests in PDVSA securities.

PDVSA did not immediately respond to a request for information.

Although PDVSA has 30 days to comply with the payment, there are concerns whether another payment of $985 million due at the end of this month, that has no grace period, can be executed.

In the first week of November, PDVSA must pay another $1.1 billion in capital payment and interest, again with no grace period, according to a local consulting firm.

The Venezuelan government in September had problems making an interest payment due to measures from U.S. banks after the U.S. government imposed financial sanctions.

Two bond operators said this week that the government had delayed an interest payment of some $27 million to investors in the country’s state electricity company. Another $430 million is due this month.

The Venezuelan government did not immediately respond to a request for comment.

(Writing by Girish Gupta, editing by G Crosse)

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