Venezuela Oil Co. On The Hook For $40M Bond
Emma Whitford, 05 March 2021
A New York judge has ordered Venezuela’s national oil company to repay about $40 million it owed to a Portuguese pipeline company on a defaulted bond, saying the oil giant failed to prove that it was impossible to repay the debt due to U.S. sanctions.
Petróleos de Venezuela SA and its subsidiary did not manage to turn up documents from Portuguese banks showing that the banks had declined to honor attempted wire transfers from PDVSA to Cimontubo-Tubagens E Soldadura LDA of Portugal, U.S. District Judge George B. Daniels wrote.
The decision comes after Judge Daniels entertained the possibility in December that sanctions might have been partly to blame for the missing payments in light of PDVSA’s argument that debt denominated in U.S. dollars could be sanctionable. The court gave PDVSA the go-ahead to obtain discovery from three banks by Feb. 1: Banco Espirito, Banco BIC and Novo Banco S.A.
“Defendants have not put forth any evidence uncovered during that time period that would support an impossibility defense,” Judge Daniels wrote Thursday. “Indeed, defendants have been afforded an additional month beyond that deadline and the evidence defendants did discover is inconsistent with an impossibility defense.”
