After announcing, among other things, the elimination of the fuel subsidy, Ecuador is experiencing peak moments with protests and transportation shutdowns. If this turbulence is overcome, the panorama could improve significantly. Venezuela enters a key month where CITGO will be the subject of attention with the expiration of PDVSA 20 and Crystallex’s lawsuit.
VENEZUELA
Last Monday, a US Court of Appeals ratified that Canadian miner Crystallex was entitled to proceed with its efforts to seize CITGO actions in the US to satisfy its dispute against Venezuela. Crystallex has a ruling in its favor for about $ 1.4Bn for the expropriation of its assets in Venezuela during the presidency of Hugo Chavez, and managed to prove that PDVSA, owner of CITGO, was Alter-Ego of the Republic, giving him the right to go after actions of the American company to auction them and thus satisfy the damages. This ratification by the Court of Appeals annuls the decision of another District court that would have introduced a break to the auction of the shares at the request of PDVSA. Apparently, the leader of the National Assembly, Juan Guaidó, is in negotiations with the US government to request support to prevent the loss of CITGO, which is also threatened by creditors of the PDVSA 2020 bonds who own 50.1% of the shares of the American oil company in collateral. Creditors could try to confiscate the company if the amortization plus the interest on the bond is not paid on time. The repayment date would be by the end of this month and it is likely that, among other things, the penalties, PDVSA will not be able to make the payment on time. Luisa Palacios, director of CITGO appointed by Guaidó, stated that there is a real risk that Venezuela will lose control of CITGO and that the Trump administration’s support is necessary to avoid this either from Crystallex’s lawsuit or by part of the creditors of PDVSA bonds …