Russia reaches outline debt restructuring agreement with Venezuela: RIA

[Eugene]

Source: Reuters

#BUSINESS NEWS OCTOBER 14, 2017 / 10:40 AM / UPDATED 27 MINUTES AGO

Russia reaches outline debt restructuring agreement with Venezuela: RIA

Reuters Staff
1 MIN READ

MOSCOW (Reuters) - Russia has reached a general agreement with Venezuela on restructuring its debt to Moscow, RIA news agency cited Russian Finance Minister Anton Siluanov as saying on Saturday.

Siluanov said Moscow hoped that it could complete talks with Caracas on restructuring its debt by the end of this year. He stressed that the talks were about debt restructuring, not about writing off the debt.

Russia’s largest oil producer, Rosneft (ROSN.MM), is buying a growing volume of Venezuelan crude and other products while extending loans to Venezuelan President Nicolas Maduro’s government.

Rosneft said in August it had made around $6 billion in pre-payments to the Venezuelan state oil company PDVSA and had no immediate plans to make any further advance payments soon.

Reporting by Dmitry Solovyov; Editing by Kevin Liffey

http://www.reuters.com/article/us-russia-venezuela-debt/russia-reaches-outline-debt-restructuring-agreement-with-venezuela-ria-idUSKBN1CJ0IN

[GatoGordo]

1. The Devil in the details

The 800lb gorilla in the room is that any financial restructuring has to be done with the approval of the National Assembly (AN). Maduro cannot just dictate a change (though he insists he can) and have it approved by his lapdogs in the Chavista created, supra-Constitutional Constituent Assembly (ANC).

Maduro's plan is to mortgage off everything in order to get a short term reprieve from his debt obligations at the end of the month. Over $2 billion is due in the next few weeks, and he doesn't have a way to pay off the interest. The problem? He doesn't control the AN, and the leadership of the AN has been VERY CLEAR that any debt taken on without their approval will not be honored, when Chavismo falls. Which is why even vultures like Goldman Sachs are not going anywhere NEAR what Maduro is selling.

So, Maduro might be promising them some sort of oilfield partnerships. Partial ownership in PdVSA maybe? What else can they offer? Maduro is going to HAVE TO give out the details, and it isn't going to be pretty. And when tomorrows elections are over (the fraud has already started), the last remnants of democracy will fall. All bets are off.

I can't imagine what Russia thinks its going to get out of this deal.

[GatoGordo]

2. Maduro faces financial nightmare in Venezuela just in time for Halloween

BY ANTONIO MARIA DELGADO
OCTOBER 12, 2017 3:57 PM

With its coffers empty and its financial moves restricted by U.S. sanctions, Venezuelan President Nicolás Maduro’s government is facing a nightmarish scenario with the approach of Halloween, when a series of debt payments totaling more than $3.5 billion are due.

Analysts said the government will do everything possible to make the payments, even if it means further cuts in already reduced food imports, which would deepen shortages in a country where a majority of people cannot get three meals a day.

But a default cannot be ruled out because of the precarious state of the country’s finances, the low level of reserves and the reluctance of strategic allies like Russia and China to continue lending money to Venezuela.

The Venezuelan government faces a string of small payments due this month, such as the $28 million owned by the state-owned Caracas electricity company.

-snip-

http://www.miamiherald.com/news/nation-world/world/americas/venezuela/article178518756.html

The guy needs the money by the end of the month. He cannot wait for "debt to be restructured". Maduro is going to have to sell some assets to either China or Russia. Unlike previous debt that he put off until the last minute, these are not bills that he has a grace period to work with.

Either Maduro pays up on time, or the wheels come off the Chavista wagon.