US offers creditors to seize Citgo if Guaidó does not pay

The US Government issued a new Executive Order that allows the holders of the PDVSA 2020 Bond to collect the collateral or guarantee in the event of a default situation.

In other words, in the event of a default of debt over 100 million dollars, the compensation mechanisms of the PDVSA 2020 Bond are activated. this instrument can execute the collateral, that is, to exercise ownership of part of the Citgo Assets ”, affirms Silvestre Molero, PDVSA Commissioner.

The PDVSA 2020 Bond commits 50% of the shares of Citgo, hence, from the moment it was signed in 2016, Venezuela had met the corresponding interest payments.

The new license issued by the US government authorizes transactions with PDVSA until July 21, 2021, the Treasury Department said in a notice, according to the Spunick news agency.

«Except as provided in paragraph [b] of this general license, as of July 21, 2021, all transactions related to Petróleos de Venezuela, SA (…) that would be prohibited by (…) Executive Order 13835 of 21 May 2018 (…) they are authorized ”, says the statement.

Now, Molero reports that Citgo's precarious situation has tended to worsen, given the projected losses based on the statements offered by the main spokespersons appointed by Juan Guaidó, from which losses in 2020 of 800 million dollars are deducted, for cause of cost overruns and expenses not attributable to the business structure.

"The loss figure contrasts with the financial history of Citgo, which had been declaring profits of up to 900 million dollars per year, under the Administration of the government of President Maduro," he says.

The coercive measure, euphemistically called Executive Order No. 13.835, issued by President Donald Trump, dated 21/05/2018, prohibited participation in transactions related to the sale, transfer, assignment, assignment, or delivery as security of any stock interest in an entity that is 50% or more owned by the Government of Venezuela.

Consequently, US citizens and foreigners doing business in and / or with the US, US persons, or using US goods or services, had to obtain a specific OFAC License before initiating any transaction involving the 8.5% Bonus and must be carried out before July 22, 2020.

The new License granted, within the framework of this Christmas 2020, establishes that: “except as provided in paragraph“ b ”of this License, all transactions related to Petróleos de Venezuela, SA, which would be prohibited by Executive Order 13.835, from 21/05/2020, are authorized

 

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