BUENOS AIRES, May 27 (Reuters) - Argentina will offer the Paris Club of creditor nations an initial cash payment of $250 million when debt renegotiation talks convene, the South American country’s official news agency said late on Tuesday.
Argentine Economy Minister Axel Kicillof was in Paris ahead of talks set to start on Wednesday to revamp about $9 billion in debt that the country has owed to the Club since its 2002 sovereign default.
The exact amount of debt owed to the 19-member Club will be worked out during the talks, state news agency Telam said.
“Contacts with the Paris Club resumed in mid-January when Minister Kicillof traveled to Paris to submit an initial proposal, which, according to government sources, included a $250 million initial payment,” Telam said.
The rest of the amount owed by Argentina in the restructuring of its Paris Club debt would be paid through a series of quotas yet to be negotiated, Telam said.
Germany is Argentina’s biggest Paris Club creditor with about 30 percent of the debt, followed by Japan with about 25 percent. Smaller holders include the Netherlands, Spain, Italy, the United States and Switzerland.
A deal with its creditors would help open up new sources of international funding for Argentina, which has been shut out of capital markets since its default 12 years ago.
Argentina and Paris Club members came close to striking a deal in 2008 but the government pulled out at the last moment, concerned about its falling foreign exchange reserves in the midst of the global financial crisis.
With its dollar reserves down 26.6 percent to $28.5 billion over the last 12 months, Buenos Aires wants a deal that does not put too much strain on its balance of payments. (Reporting by Hugh Bronstein and Walter Bianchi; Editing by Diane Craft)