Venezuelan President Nicolas Maduro said last week that he was aiming to begin a dialogue with the country's political opposition next month in Mexico facilitated by Norway. In June, the US, the EU and Canada said they would be willing to revise their sanctions on Maduro's government if the dialogue with the opposition led to significant progress toward free and fair elections.
Also last week, UK Supreme Court held hearings from Monday to Wednesday with regards to which administration should have control over the gold valued at $2bn held in the vaults of the Bank of England. Prior to the hearings, the British government, which had been invited to clarify its position by the UK Supreme Court, asserted it has the has “the right to decide who to recognise as the legitimate head of a foreign state”. The legal battle for the gold began after opposition figure Juan Guaido declared himself interim president in the wake of public protests in Venezuela in January 2019. After that, the Bank of England refused to fulfill a request made by the Banco Central de Venezuela (BCV) to have access to the gold to buy medicines and equipment to tackle the COVID-19 pandemic. The judges said it will take time before they give their decision.
Finally, last week, Reuters reported that PDVSA creditors are targeting $600m of funds held in Portuguese bank Novo Banco. A judge in a Lisbon district court on 8th July granted a creditor the right to seize funds held in Novo Banco, the creditor previously won a judgment against PDVSA after suing in Britain.
For Venezuela bonds, the de-jure and de-facto administrations disagree on how bondholders should look at prescriptions periods. On 28th September 2020, Venezuela’s opposition-designated attorney general, appointed by National Assembly President Juan Guaido, published a statement saying that it is the view of the Guaido team that the contractual prescription period has not begun to run in respect of an overdue amount of principal or interest payable under any of the bonds issued by the government. According to this statement, the 10 and 3 year periods set out in the prescription clause of most Venezuela, PDVSA and ELECAR bonds will not begin to run unless and until: - the Fiscal Agent receives the full amount owed by the Republic and
- the holders have been notified of such event.
The attorney general also indicated that the statutory limitation period of six years under the laws of New York still applies.
This was preceded, however, by the launch on 15th September 2020 of the Maduro conditional offer and a subsequently imminent statement from Maduro’s finance minister Delcy Rodriguez who highlighted that with the third anniversary for the first missed bond payment in 2017 coming soon, prescription deadlines for interests would expire. Under the offer, bondholders would agree to renounce rights to litigate and in exchange prescriptions deadlines would be waived.
http://www.mppef.gob.ve/comunicados-oficiales/
The Maduro conditional offer expired on 14th March 2021 and won’t be extended again, however the government said it will keep talking with Venezuela, PDVSA and Electricidad de Caracas bondholders in order to reach agreements under the same conditions as those with whom the Tolling Agreements are entered into. The proposed mechanism would require licenses from the US Treasury Department's Office of Foreign Assets Control, which administers sanctions. |
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