Venezuela's PDVSA accuses paper of defamation, harming bond swap

October 14, 2016 1:15 PM EDT

A dog walks past a gas station with the logo of the Venezuelan state oil company PDVSA in Caracas, Venezuela, September 14, 2016. REUTERS/Henry Romero

Get inside Wall Street with StreetInsider Premium. Claim your 2-week free trial here.

CARACAS (Reuters) - Venezuela's state oil company PDVSA filed a lawsuit against local newspaper El Nuevo Pais on Friday, accusing it of defamation and damaging efforts to persuade investors to take up a $5.3 billion bond swap offer.

PetrĂ³leos de Venezuela, S.A. [PDVSA.UL] President Eulogio Del Pino personally lodged the accusations against the anti-government Caracas-based newspaper for saying in an article last week that the company was in financial trouble.

Venezuela has offered to exchange bonds maturing in 2017 for a new bond maturing in 2020, a deal that would ease heavy payments by the company due next month and in 2017.

The swap requires more than 50 percent participation by investors, and PDVSA earlier this week extended the swap deadline for a second time, to Monday. Debt prices fell, suggesting investors' lack of enthusiasm. [nL1N1CJ1NM]

"They are trying to harm, in whatever way they can, an operation that we have offered transparently," Del Pino said of El Nuevo Pais outside the Caracas courthouse after filing the lawsuit.

"The socialist government is privatizing PDVSA," El Nuevo Pais said in its article, referring to the use of PDVSA's U.S. subsidiary Citgo Holding Inc as collateral to back the new debt.

Del Pino reiterated the Monday deadline for the swap, addressing speculation about another delay.

The government has repeatedly insisted that it would pay its debts. Central bank President Nelson Merentes assured investors, in a rare private meeting in Washington last week, that they would be paid.

(Reporting by Eyanir Chinea and Corina Pons.; Writing by Girish Gupta; Editing by Andrew Cawthorne and Richard Chang)

Serious News for Serious Traders! Try Premium Free!

You May Also Be Interested In

Related Categories


Add Your Comment