CARACAS Feb 1 (Reuters) - Deutsche Bank, the trustee for a $100 million bond issued by Venezuelan steelmaker Sidetur, has issued a notice of default saying the company violated one of the provisions of the bond sale.
Deutsche Bank said in a Jan. 30 statement that Sidetur, nationalized by Venezuelan President Hugo Chavez in 2010, had failed to make necessary deposits to a debt servicing reserve fund required by the covenants of the financing deal.
The company, which makes rebar, flat and angle steel products, did not respond to phone calls seeking comment.
Deutsche Bank declined to comment on the matter, but did confirm that a notice of default was issued.
The situation highlights growing concerns about the leadership of Venezuela's government as Chavez remains in Cuba for medical treatment nearly two months after a complex cancer operation in early December.
His allies insist he is fulfilling his duties as normal even though he has not been seen nor heard from since the operation.
But business leaders say the government has avoided making key decisions in Chavez's absence including a currency devaluation they say is necessary to resolve nagging product shortages.
Defaulting on bonds frequently implies that an issuer failed to make a coupon payment. But even without missing payments, countries or companies can be in "technical default" by failing to comply with the often complex terms agreed upon at issue.
The bond, which carries a coupon of 10 percent, has a bid/ask spread of 75-80 cents on the dollar, with a yield of 20.89 percent, according to pricing from Deutsche Bank's Autobahn trading platform via Thomson Reuters Eikon.
Deutsche Bank said in the default statement it did not plan to take any further action. It was not immediately evident if bondholders would push for measures to be taken.
The socialist Chavez has nationalized numerous companies over the last six years ranging from crude oil projects to cement, steel and food producers.
Though many of those companies have filed arbitration suits alleging Venezuela did not adequately compensate them, the Chavez government has avoided disputes with bondholders affected by the state takeovers.