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REUTERS: Venezuela run out of money settled a $ 1.2 billion US arbitration claim that will prevent a creditor from stripping its foreign assets, jewel of the crown, refining company Citgo Petroleum Corp. based in the United States, according to Canadian court documents.
The agreement with Crystallex International Corp suspends the Canadian mining company's action in favor of a court-ordered auction of Citgo's control in order to collect an arbitration award against Venezuela, which has reached more than 1.4 billion US dollars with interest. Citgo is based in Houston, Texas.
On November 23, Venezuela made an initial payment of US $ 425 million, mainly in the form of "liquid securities", according to a file filed in the Ontario Court of Justice, in which Crystallex had sought protection. of its creditors in 2011.
Part of the payment was made in bonds issued by Venezuela and its state oil company, PDVSA, according to a Venezuelan source in the finance sector familiar with the issue.
Venezuela agreed to pay the balance in installments early in 2021. If Venezuela fails to provide a guarantee by January 10 for the remaining payments, Crystallex can resume the legal proceedings.
A US judge in Delaware was scheduled to hear Crystallex's arguments on December 20 for a court-ordered auction of Citgo's control. The company's three US refineries are a key destination for crude oil exports from Venezuela. Citgo has been valued at billions of dollars.
Venezuela managed to protect Citgo as the country was hit by an economic crisis and US sanctions, and ended payments of tens of billions of dollars in debt. Last month, Caracas made payments to investors holding bonds guaranteed by Citgo shares.
Venezuela expropriated a Crystallex gold mining project in 2011, which resulted in the 2016 arbitration award. Crystallex and Venezuela reached an agreement last year, but Caracas failed to maintain its payments after transferring 75 million US dollars.
As Venezuelan debt defaults accumulated and US sanctions isolated the country, creditors moved closer to PDVSA's assets abroad.
ConocoPhillips announced in October that it received $ 345 million from PDVSA in the third quarter, under a four-year contract to settle an arbitration award of $ 2 billion resulting from the loss of Assets during the nationalization campaign of 2007.
Rusoro Mining Ltd reached an agreement with Venezuela in October. The Canadian mining company has taken steps with Citgo this year to obtain a US $ 1.3 billion arbitration on the nationalization of its gold assets in the country.
(Report by Tom Hals in Wilmington, Delaware, additional report by Corina Pons in Caracas, edited by David Gregorio)
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