September 30, 2019 / 9:34 PM / 3 months ago

UPDATE 1-Venezuela's Maduro seeks to revive stalled debt talks, bondholders unimpressed

(Adds economist, investor comment)

By Mayela Armas

CARACAS, Sept 30 (Reuters) - Venezuela wants to reopen contacts with foreign bondholders after a two-year hiatus to renegotiate some $60 billion of foreign debt, President Nicolas Maduro said on Monday, but investors gave short shrift to the suggestion.

Venezuela said in 2017 it wanted a restructuring, but the process quickly stalled amid a national political and economic crisis, and the imposition of U.S. financial sanctions.

At a news conference, Maduro gave instructions to Vice Presidents Delcy Rodriguez and Tareck El Aissami - both of whom are on the U.S. sanctions list - to contact creditors again.

“You two, call a debt renegotiation round with all the bondholders in the world, let’s establish a timetable of immediate solutions,” he said.

“I want to meet them here or anywhere in the world that we need to go, except the United States, I don’t want to go the United States any more for now.”

U.S. President Donald Trump calls Maduro’s government illegitimate and recognizes Congress head and opposition leader Juan Guaido as Venezuela’s interim president.

Guaido’s team is also pursuing plans to renegotiate Venezuela’s debt. He wants to prevent creditors from taking Venezuela’s main foreign asset, U.S. refiner Citgo, as partial repayment for debt.

Creditors have had minimal contact with Venezuelan officials because Maduro is not seen as a credible negotiator and U.S. sanctions prevent many from taking part in such meetings.

“Venezuela’s public debt bonds were issued under New York law, so any debt negotiation can only be done by the Guaido government, whose legitimacy is recognized by the United States,” tweeted Venezuelan economist Francisco Rodriguez.

“A renegotiation with Nicolas Maduro has no legal validity,” added Rodriguez, who was the economic adviser to an opposition candidate who ran against Maduro in last year’s election.

One U.S. bondholder told Reuters it would be impossible for Maduro to negotiate given the U.S. sanctions, its inability to issue new debt, and the Guaido team’s advances with creditors.

Maduro’s suggestion might have been intended to try and encourage bondholders to pressure the U.S. government to ease sanctions against Venezuela, he surmised.

Asked if Maduro’s renewed push for a restructuring had any mileage, another investor replied: “No. Zero. Nothing.” (Additional reporting by Deisy Buitrago and Vivian Sequera; Writing by Andrew Cawthorne; editing by Grant McCool)

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