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Tuesday, December 1, 2020

US bans Citgo shares pledged on PDVSA bonds

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Kamal Saini
Kamal S. has been Journalist and Writer for Business, Hardware and Gadgets at Revyuh.com since 2018. He deals with B2b, Funding, Blockchain, Law, IT security, privacy, surveillance, digital self-defense and network policy. As part of his studies of political science, sociology and law, he researched the impact of technology on human coexistence. Email: kamal (at) revyuh (dot) com

The US Treasury extended sanctions against the Venezuelan oil state corporation PDVSA, including operations with the company’s bonds, 50.1% of which are guaranteed by its American “daughter” Citgo. The agency banned any transactions with Citgo shares pledged under PDVSA bonds with maturity in 2020, for 90 days – until January 22, 2020.

This time, according to the US Treasury, is necessary to spend on “restructuring or refinancing payments” of a Venezuelan state-owned company. On October 28, PDVSA is due to pay $ 913 million in bonds, which are secured by a stake in Citgo. But, as the American media wrote, it is highly likely that she will not be able to do this – she does not have that kind of money.

In this regard, PDVSA may default, which gives its creditors the right to claim the shares of the American “daughter”. But now, by the decision of the US Treasury, PDVSA bondholders will not be able to foreclose on their 50.1% stake in Citgo.

Washington imposed sanctions on PDVSA in late January. As a result, US $ 7 billion of US company assets were blocked in the US. The US also helped Venezuelan opposition leader Juan Guaido actually gain control of Citgo. The US Treasury said it could ease Citgo restrictions in three months if Venezuelan opposition and PDVSA lenders come to an agreement.

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