Nationalized Sidetur's Notes Remain Unpaid: Implications for PDVSA and Venezuela
NEW YORK, June 10, 2013 /PRNewswire/ -- The Steering Group of Holders of the 10% Notes Due 2016 guaranteed by Siderurgica del Turbio, S.A. ("Sidetur") consists of institutional investors who make significant investments in debt securities issued by Petroleos de Venezuela, S.A. ("PDVSA") and by the Republic of Venezuela. The Steering Group is concerned about further investments in PDVSA or the Republic in light of Venezuela's current approach to the remaining US$73,750,000 in Sidetur's Notes.
Venezuela has nationalized Sidetur, taking control of Sidetur's cash and other material assets. Since the nationalization, Sidetur has defaulted on the Notes. The Steering Group is aware Venezuela has addressed other, much larger nationalizations and defaults — Petrozuata, Cerro Negro, Fertinitro, and Electricidad de Caracas — in a constructive manner by ensuring full and prompt repayment of the debt securities of the affected businesses. But Venezuela has not yet proceeded this way in Sidetur's case.
The lack of progress toward this proven solution, especially in connection with the relatively small amount of Sidetur debt, causes the Steering Group concern about Venezuela's commitment to capital markets programs and obligations. The Steering Group does not imagine there has been a change in Venezuelan policy on smooth and cost-effective capital markets access. The Steering Group remains hopeful Venezuela will address Sidetur's case promptly, in the same constructive manner as the other nationalizations. In the meantime, however, the Steering Group plans to refrain from further investments in PDVSA or the Republic, and the Steering Group understands other investors have similar concerns.
For inquiries, contact the Steering Group's legal advisor Tim DeSieno, Bingham McCutchen LLP, +1 212 705 7426; email@example.com.
This communication is neither an offer nor a solicitation to participate in any transaction in any jurisdiction.
SOURCE Bingham McCutchen LLP
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