| NEW YORK/BUENOS AIRES
NEW YORK/BUENOS AIRES Argentina's economy minister on Monday told a mediator in the country's dispute with holdout investors that the U.S. court ruling against the country is "impossible" to fulfill and a stay is necessary in order to reach a solution for all creditors.
The country needs to make a deal with the holdouts who rejected debt restructurings after its 2002 default if it is to avoid a new default just as it struggles with recession and dwindling reserves.
Kicillof spent four hours hashing through the case in New York on Monday with the special master, Daniel Pollack, who was appointed by U.S. District Judge Thomas Griesa to find common ground in the years-long dispute.
The minister re-iterated that Argentina could not carry out Griesa's ruling to immediately pay $1.33 billion plus accrued interest to the group of holdouts led by Elliott Management Corp and Aurelius Capital Management, according to a ministry statement.
He also underscored, however, that Argentina was committed to continue negotiating to find a just solution for all creditors. For this purpose, Kicillof had made clear "it was necessary to reinstate the stay given that the case involved not just the litigators but could also be extended to all the creditors who did not join the swaps," the ministry said.
More than seven percent of Argentina's investors did not accept the tough terms of its debt swaps in 2005 and 2010.
Reuters could not reach holdout investors for reaction to the statement.
Kicillof has sealed deals with the Paris Club of creditor nations and Spanish oil major Repsol in the last few months in a bid to attract investment back to Argentina and regain access to global capital markets.
On Monday, he elbowed his way through a gaggle of at least 50 reporters after meeting with Pollack without commenting on the talks, before flying back the same night to Argentina.
Pollack said in a separate statement he had also met with representatives of holdouts last week and both they and Argentina had "indicated an intention to continue meeting."
Argentina attempted to pay bondholders who participated in its debt swaps a regularly scheduled coupon payment due at the end of June, in defiance of Griesa's order that Argentina could not service its restructured debt without paying holdouts.
The judge ordered that the funds deposited at the Bank of New York Mellon's account at the Central Bank of Argentina should be returned to the South American nation.
If a deal is not worked out by July 30 and Argentina does not make a payment it will be considered to have defaulted for a second time in 12 years.
(Additional eporting by Alejandro Lifschitz and Jorge Otaola in Buenos Aires and Nate Raymond and Rodrigo Campos in New York; Editing by James Dalgleish, W Simon and Andrew Hay)