/raid1/www/Hosts/bankrupt/TCRLA_Public/201201.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Tuesday, December 1, 2020, Vol. 21, No. 240
Headlines
A R G E N T I N A
PROVINCE OF NEUQUEN: S&P Lowers ICRs to 'SD' on Bond Restructuring
B R A Z I L
BRAZIL: Faces US$112 Billion Refinancing Challenge in Early 2021
C H I L E
LATAM AIRLINES: Expects to Exit from Chapter 11 in 2H of 2021
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: CONEP Notes Importance of Responsible Mining
DOMINICAN REPUBLIC: Deadline to Pay US$34.4BB Debt Service Looms
DOMINICAN REPUBLIC: Free Zones Operate at 90%+ Capacity
G U A T E M A L A
BANCO INDUSTRIAL: S&P Affirms BB- LT Rating, Off CreditWatch Neg.
GUATEMALA: S&P Removes 'BB-/ BB' Long-Term SCRs, Outlook Stable
P U E R T O R I C O
ALM LLC: Case Summary & 20 Largest Unsecured Creditors
V E N E Z U E L A
CITGO PETROLEUM: Venezuela Supreme Court Sentences 6 Ex Directors
- - - - -
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A R G E N T I N A
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PROVINCE OF NEUQUEN: S&P Lowers ICRs to 'SD' on Bond Restructuring
------------------------------------------------------------------
S&P Global Ratings lowered its long-term foreign and local currency
issuer credit ratings to 'SD' from 'CC'. S&P also lowered the
issue-level rating on Neuquen's senior unsecured $366 million notes
(the Tideneu) to 'D' from 'CC'. Finally, S&P affirmed its 'CCC-'
senior secured issue rating on the province's $5.5 million bond due
April 2021 that was not included in the restructuring process.
Outlook
S&P doesn't assign outlooks to 'SD' ratings because they express a
condition and not a forward-looking opinion of default
probability.
Upside scenario
S&P said, "We would only raise the issuer credit rating, most
likely to the 'CCC' category, as soon as the province concludes all
the restructuring processes underway on its commercial debt. We
would raise the issue rating "Tideneu" to the 'CCC' category
shortly after the restructure terms become effective."
Rationale
A two-year recession, the effects of COVID-19 and its related
lockdowns, and low oil prices have impaired Neuquen's fiscal and
liquidity position this year. Aiming to reduce short-term liquidity
pressures and with limited access to external financing, the
province restructured two of its international bonds with a total
outstanding amount of US683 million. Of the two bonds, S&P rates
the one originally due in 2025 known as "Tideneu."
Compared to the old terms, the restructured bonds have extended
maturities and lower interest. Specifically for "Ticade" (a senior
secured bond that S&P doesn't rate) the royalties pledge was
reduced, and Neuquen will make a cash payment to bondholders
equivalent to 3.5% of the outstanding amount of the bond on Nov.
27, 2020.
In the case of "Tideneu", the province will pay 70% of the coupon
due Oct 27 (within the formal grace period) in the form of
additional "Tideneu" notes and the rest in cash on Nov. 27.
S&P said, "We understand that the new legal documents on the
restructured bonds removed the cross-default clauses between the
two bonds. It also resulted in net present value losses for
investors, but we note that the "Ticade" (the senior secured bond)
losses were slightly less.
"We also consider that the province is in the process of concluding
a restructuring of an unrated commercial loan denominated in
foreign currency with an international bank."
Lastly, a second senior secured bond backed by oil royalties, known
as "TICAP" (rated 'CCC-' with an outstanding amount of $5.5 million
and due in April 2021) was not part of the restructuring process.
The restructuring process provides financial space to the province
by significantly reducing its debt service in foreign currencies in
2020-2021. S&P said, "That said, the province's creditworthiness
remains structurally weak, in our view. We expect consistent
operating deficits in 2020-2022, which would further worsen
Neuquen's liquidity. Moreover, additional risks stem from the
possibility of the national government transferring fiscal stress
to its subnational government and Argentina's restrictive currency
exchange controls. When the processes conclude, we will assign a
forward-looking rating, most likely in the 'CCC' category."
Ratings List
Downgraded
To From
Neuquen (Province of)
Senior Unsecured D CC
Downgraded; CreditWatch/Outlook Action
To From
Neuquen (Province of)
Issuer Credit Rating SD/-- CC/Negative/--
Ratings Affirmed
Neuquen (Province of)
Senior Secured CCC-
===========
B R A Z I L
===========
BRAZIL: Faces US$112 Billion Refinancing Challenge in Early 2021
----------------------------------------------------------------
Rio Times Online reports that Brazil's debt has ballooned to
unprecedented levels due to the COVID-19 pandemic and the
government faces a US$112 (R$600) billion refinancing challenge
early next year, with April's funding needs the highest ever for a
single month.
Publicly, Treasury officials insist there will be no problem
getting investors to extend their loans, according to Rio Times
Online. Almost all of Brazil's debt is denominated in reais and
over 90% of it is held by domestic investors, the report notes.
About Brazil
Brazil is the fifth largest country in the world and third largest
in the Americas. Jair Bolsonaro is the current president, having
been sworn in on Jan. 1, 2019.
Fitch Ratings affirmed on November 23, 2020, Brazil's Long-Term
Foreign Currency Issuer Default Rating at 'BB-' with a Negative
Outlook. Standard & Poor's credit rating for Brazil stands at BB-
with stable outlook (April 2020). Moody's credit rating for
Brazil was last set at Ba2 with stable outlook (April 2018). DBRS's
credit rating for Brazil is BB (low) with stable outlook (March
2018).
As reported in the Troubled Company Reporter-Latin America, Fitch
Ratings' negative outlook in November 2020 for Brazil reflects
the severe deterioration in fiscal deficit and public debt burden
during 2020 and persisting uncertainty regarding fiscal
consolidation prospects. Fitch expects the economy to recover
from 2021; however, uncertainty around political and policy
developments, combined with a resurgence in global coronavirus
infections, continue to cloud the outlook.
=========
C H I L E
=========
LATAM AIRLINES: Expects to Exit from Chapter 11 in 2H of 2021
-------------------------------------------------------------
Daniel Martinez Garbuno of Seeking Alpha reports that Roberto
Alvo, LATAM's CEO, said that the airline would exit its Chapter 11
reorganization at some point during the second half of 2021. He
added that the US's bankruptcy filing will allow LATAM to be more
competitive and go one-on-one with low-cost operators.
During a webinar in Chile, Roberto Alvo spoke about the outlook for
Chilean carriers going into 2021. He joined Estuardo Ortiz,
JetSMART's CEO, and Jose Ignacio Dougnac, Sky Airline's CEO.
He said that 2021 will be a recovery year, but it will have its ups
and downs. According to the airline, LATAM is operating at a 33%
capacity and expects to end the year near 40%.
Meanwhile, the airline continues its process under the Chapter 11
bankruptcy in the U.S. Last quarter, the New York City court
approved LATAM's DIP Financing for US$2.45 billion. Among the three
Latin American carriers that are under Chapter 11 bankruptcies,
LATAM received the largest funding. And the airline is confident
about its future. Alvo said,
"We are going to exit Chapter 11 strengthened. We will have a
competitive cost structure, similar to the ones held by Sky and
JetSMART, which will allow us to seize more opportunities. LATAM
expects to exit its Chapter 11 reorganization during the second
half of 2021."
Shrink in Size
Seeking Alpha notes that while the company hasn't formally
presented its reorganization plan, LATAM is already shrinking its
size.
In May 2020, LATAM announced the rejection of 19 leasing contracts.
It reduced its fleet by returning six long-haul widebody jets and
13 narrow-body Airbus models. Then, in September 2020, it was
reported that the airline planned to offload 19 more Airbus A320
family leases.
Still, the final size of the fleet is unknown. In its third-quarter
results, LATAM stated that it "is currently evaluating the adequate
fleet needs for the following years." LATAM ended the quarter with
a total fleet of 317 aircraft. Of these, 102 are under operating
leases, and 215 belong to the airline.
In the third-quarter, LATAM reduced its expenses by 55%. It managed
to reduce its wages and benefits payments by 56%. The airline, like
many others, has furloughed people across its several branches. It
even closed its regional domestic carrier LATAM Argentina.
About LATAM Airlines
LATAM Airlines Group S.A. -- http://www.latam.com/-- is a
pan-Latin American airline holding company involved in the
transportation of passengers and cargo and operates as one unified
business enterprise.
LATAM Airlines Group S.A. is the largest passenger airline in South
America. Before the onset of the COVID-19 pandemic, LATAM offered
passenger transport services to 145 different destinations in 26
countries, including domestic flights in Argentina, Brazil, Chile,
Colombia, Ecuador and Peru, and international services within Latin
America as well as to Europe, the United States, the Caribbean,
Oceania, Asia and Africa.
LATAM Airlines Group S.A. and its 28 affiliates sought Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 20-11254) on May 25,
2020. Affiliates in Chile, Peru, Colombia, Ecuador and the United
States are part of the Chapter 11 filing.
The Debtors disclosed $21,087,806,000 in total assets and
$17,958,629,000 in total liabilities as of Dec. 31, 2019.
The Hon. James L. Garrity, Jr., is the case judge.
Debtors tapped Cleary Gottlieb Steen & Hamilton LLP as general
bankruptcy counsel; FTI Consulting as restructuring advisor; and
Togut, Segal & Segal LLP and Claro & Cia in Chile as special
counsel. Prime Clerk LLC is the claims agent.
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: CONEP Notes Importance of Responsible Mining
----------------------------------------------------------------
Dominican Today reports that the president of the National Council
of Private Enterprise (CONEP), Pedro Brache, recognized the
importance of mining for the Dominican Republic's development.
"Just at a time when we are exploring formulas that allow us to
reactivate our economy and achieve the sustainability of our
development, we must prioritize support for responsible mining in
our country," Brache said, according to Dominican Today.
In this sense, the president of CONEP highlighted the participation
that mining activity has had in recent years in attracting foreign
investment, exports, job creation, national purchases, and
contributions to the treasury, the report relays.
He added that the potential for performance in all these indicators
is even more significant, promoting public policies that benefit
said sector, the report says.
"We must recognize that even in the face of a complex international
panorama, President Luis Abinader promotes a favorable climate for
investment, elimination of obstacles, and reduction of
bureaucracy," said Brache, the report notes.
Likewise, he called for paying particular attention to mining
projects, evaluating the economic, social, and environmental impact
that they may have, the report discloses.
About Dominican Republic
The Dominican Republic is a Caribbean nation that shares the island
of Hispaniola with Haiti to the west. Capital city Santo Domingo
has Spanish landmarks like the Gothic Catedral Primada de America
dating back 5 centuries in its Zona Colonial district. Luis
Rodolfo Abinader Corona is the current president of the nation.
The Troubled Company Reporter-Latin America reported in April 2019
that the Dominican Today related that Juan Del Rosario of the UASD
Economic Faculty cited a current economic slowdown for the
Dominican Republic and cautioned that if the trend continues,
growth would reach only 4% by 2023. Mr. Del Rosario said that if
that happens, "we'll face difficulties in meeting international
commitments."
An ongoing concern in the Dominican Republic is the inability of
participants in the electricity sector to establish financial
viability for the system.
Standard & Poor's credit rating for Dominican Republic stands at
BB- with negative outlook (April 2020). Moody's credit rating for
Dominican Republic was last set at Ba3 with stable outlook (July
2017). Fitch's credit rating for Dominican Republic was last
reported at BB- with negative outlook (May 8, 2020).
DOMINICAN REPUBLIC: Deadline to Pay US$34.4BB Debt Service Looms
----------------------------------------------------------------
Dominican Today reports that debt service payments begin to
accumulate and in this decade some US$34.4 billion will have to be
paid, or 42.2% of all that is pending to creditors, between debt
service, interest and commissions, according to the estimates from
the Public Credit Directorate of the Finance Ministry.
The rising curve of the Dominican debt puts pressure on public
finances, according to Dominican Today. In total, the Dominican
Republic owes foreign creditors US$81.5 billion until 2060, the
report notes.
Last September, President Luis Abinader himself pointed out that
within two years the impact of the country's debt accumulated in
recent years will be felt and that "even if the economy recovers,
the debt crisis will remain," the report relays.
The president pointed out that the Government is proposing a
progressive reduction in the rate of debt, the report relays. At
the end of September, the amount of consolidated public debt, both
external and internal, totaled US$51.9 billion, or 66% GDP, the
report notes.
The Finance Ministry has as a strategy, as it advised Congress in
its quarterly debt report, to maintain long terms in external and
internal financing, as well as to "implement liability management
operations that allow containing exposure to refinancing risk,"
says the document, the report notes.
About Dominican Republic
The Dominican Republic is a Caribbean nation that shares the island
of Hispaniola with Haiti to the west. Capital city Santo Domingo
has Spanish landmarks like the Gothic Catedral Primada de America
dating back 5 centuries in its Zona Colonial district. Luis
Rodolfo Abinader Corona is the current president of the nation.
The Troubled Company Reporter-Latin America reported in April 2019
that the Dominican Today related that Juan Del Rosario of the UASD
Economic Faculty cited a current economic slowdown for the
Dominican Republic and cautioned that if the trend continues,
growth would reach only 4% by 2023. Mr. Del Rosario said that if
that happens, "we'll face difficulties in meeting international
commitments."
An ongoing concern in the Dominican Republic is the inability of
participants in the electricity sector to establish financial
viability for the system.
Standard & Poor's credit rating for Dominican Republic stands at
BB- with negative outlook (April 2020). Moody's credit rating for
Dominican Republic was last set at Ba3 with stable outlook (July
2017). Fitch's credit rating for Dominican Republic was last
reported at BB- with negative outlook (May 8, 2020).
DOMINICAN REPUBLIC: Free Zones Operate at 90%+ Capacity
-------------------------------------------------------
Dominican Today reports that free zones in the Dominican Republic
operate above 90% capacity and increased exports 9.8% in September,
according to Central Banker, Hector Valdez Albizu.
A meeting of the Central American Monetary Council with presidents
of central banks of the region and representatives of the
International Monetary Fund (IMF) analyzed how the central banks of
the region have generally adopted monetary and financial easing
measures in order to mitigate the impact of the pandemic on the
productive sectors and households, according to Dominican Today.
"The monetary stimulus plan implemented in the Dominican Republic
was highlighted, which amounts to more than 4% of GDP, which has
allowed to reduce the active interest rate of commercial banks by
more than 300 base points and boost credit in national currency,
which reached an expansion of around 10% year-on-year, the highest
growth rate in the region," the Central Bank said in a statement
obtained by the news agency.
About Dominican Republic
The Dominican Republic is a Caribbean nation that shares the island
of Hispaniola with Haiti to the west. Capital city Santo Domingo
has Spanish landmarks like the Gothic Catedral Primada de America
dating back 5 centuries in its Zona Colonial district. Luis
Rodolfo Abinader Corona is the current president of the nation.
The Troubled Company Reporter-Latin America reported in April 2019
that the Dominican Today related that Juan Del Rosario of the UASD
Economic Faculty cited a current economic slowdown for the
Dominican Republic and cautioned that if the trend continues,
growth would reach only 4% by 2023. Mr. Del Rosario said that if
that happens, "we'll face difficulties in meeting international
commitments."
An ongoing concern in the Dominican Republic is the inability of
participants in the electricity sector to establish financial
viability for the system.
Standard & Poor's credit rating for Dominican Republic stands at
BB- with negative outlook (April 2020). Moody's credit rating for
Dominican Republic was last set at Ba3 with stable outlook (July
2017). Fitch's credit rating for Dominican Republic was last
reported at BB- with negative outlook (May 8, 2020).
=================
G U A T E M A L A
=================
BANCO INDUSTRIAL: S&P Affirms BB- LT Rating, Off CreditWatch Neg.
-----------------------------------------------------------------
S&P Global Ratings removed its ratings on Banco Industrial and
Banco G&T Continental from CreditWatch, where they had been placed
with negative implications Nov. 23, 2020, and affirmed its
long-term ratings on the banks at 'BB-' and its short-term ratings
on the banks at 'B'. The outlook on the ratings is stable.
S&P is removing the CreditWatch with negative implications from its
ratings on Guatemala-based banks Banco Industrial S.A. and Banco
G&T Continental S.A., and affirming its 'BB-/B' issuer credit
ratings on both entities.
The stable outlook on Banco Industrial and Banco G&T reflects that
on the Guatemalan sovereign rating.
Following the payment that Guatemala made to TECO on Nov. 23, Bank
of New York Mellon (BNYM) disbursed a US$15.75 million coupon
payment on a US$700 million 2026 Eurobond to bondholders. This
coupon payment was made within the 30-day grace period ending Dec.
3, 2020. It was previously blocked by a restraining notice from a
U.S. court due to a commercial dispute between Guatemala and TECO.
The claim by TECO commenced in 2009 as a commercial dispute on
electricity tariffs.
S&P said, "We believe Guatemala has the financial capacity and
willingness to make the payments on its debt. The Guatemalan
government showed its capacity to unfreeze the funds held by BNYM
before the end of the grace period, and we expect upcoming debt
payments will be made in a timely manner. In this regard,
Inter-American Development Bank payments due on Nov. 24, were
timely and fully paid. We believe the threat to debt service
payments posed by legal challenges has receded.
"Our ratings on Banco Industrial and Banco G&T Continental move in
tandem with those on the sovereign, reflecting their large market
share and broad presence in Guatemala. In this sense, we rarely
rate financial institutions above the sovereign long-term rating,
as a bank business is highly sensitive to sovereign stress."
GUATEMALA: S&P Removes 'BB-/ BB' Long-Term SCRs, Outlook Stable
---------------------------------------------------------------
S&P Global Ratings removed its long-term foreign and local currency
sovereign credit ratings on Guatemala from CreditWatch with
negative implications, where they had been placed on Nov. 20, 2020,
and affirmed the ratings at 'BB-' and 'BB', respectively. The
outlook is stable. At the same time, S&P affirmed its 'B'
short-term foreign and local currency sovereign credit ratings. The
transfer and convertibility assessment is unchanged at 'BB+'.
Outlook
S&P said, "The stable outlook reflects our view that despite recent
legal challenges, the sovereign will remain committed to timely and
full payment of its debt service obligations. We expect that a
combination of economic recovery starting next year and cautious
economic policies will help reverse the near-term deterioration in
Guatemala's fiscal and debt profiles, limiting the long-term
negative impact on its financial profile."
Downside scenario
S&P said, "We could take a negative rating action during the next
12-18 months if further legal challenges impair the government's
ability to service its debt service obligations. Also, we could
lower the ratings if the expected contraction in Guatemala's
economy and rising government fiscal deficit in 2020 lead to
persistently weak public finances over the medium term. A weakening
of Guatemala's fiscal or debt profiles, potentially due to a
prolonged economic downturn or greater-than-expected fiscal
deterioration, could weaken the sovereign's financial profile
beyond our expectations and result in a downgrade."
Upside scenario
S&P could raise the ratings over the same time frame if the impact
of the current pandemic is less damaging to the economy than it
expects, and if good economic management were to substantially
improve Guatemala's economic growth prospects and public finances
on a sustained basis. Such an improvement would likely stem from
the implementation of a reform agenda that strengthens Guatemala's
governance and public institutions, increasing its tax revenues.
Rationale
Following the payment that Guatemala made to TECO Guatemala
Holdings (TECO) on Nov. 24, Bank of New York Mellon (BNYM)
disbursed the following day a US$15.75 million coupon payment on a
US$700 million 2026 Eurobond to bondholders. This coupon payment
was made within the 30-day grace period ending Dec. 3, 2020. The
payment was previously blocked by a restraining notice of a U.S.
court due to a commercial dispute between Guatemala and TECO.
TECO's claim commenced in 2009 as a commercial dispute over
electricity tariffs.
S&P believes Guatemala has the financial capacity and willingness
to make the payments on its debt. The Guatemalan government showed
its capacity to unfreeze the funds held by BNYM before the grace
period ended, and we expect upcoming debt payments will be made in
a timely manner. In this regard, Inter-American Development Bank
payments due on Nov. 24 were timely and fully paid. We believe the
threat to debt service payments posed by legal challenges has
receded.
Guatemala's solid external position, moderate general government
debt to GDP, and sound monetary policy constitute relative
strengths. S&P's ratings on Guatemala also reflect its view of
still-developing governing public institutions and a challenging
political environment that constrains policymaking effectiveness.
Low GDP per capita and medium-term economic growth prospects also
remain weak for the rating.
In accordance with S&P's relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the methodology
applicable. At the onset of the committee, the chair confirmed that
the information provided to the Rating Committee by the primary
analyst had been distributed in a timely manner and was sufficient
for Committee members to make an informed decision.
After the primary analyst gave opening remarks and explained the
recommendation, the Committee discussed key rating factors and
critical issues in accordance with the relevant criteria.
Qualitative and quantitative risk factors were considered and
discussed, looking at track-record and forecasts.
The committee's assessment of the key rating factors is reflected
in the Ratings Score Snapshot above.
The chair ensured every voting member was given the opportunity to
articulate his/her opinion. The chair or designee reviewed the
draft report to ensure consistency with the Committee decision. The
views and the decision of the rating committee are summarized in
the above rationale and outlook. The weighting of all rating
factors is described in the methodology used in this rating
action.
Ratings List
Ratings Affirmed
Guatemala
Transfer & Convertibility Assessment
Local Currency BB+
Guatemala
Senior Unsecured BB-
Ratings Affirmed; CreditWatch/Outlook Action
To From
Guatemala
Sovereign Credit Rating
Foreign Currency BB-/Stable/B BB-/Watch Neg/B
Local Currency BB/Stable/B BB/Watch Neg/B
=====================
P U E R T O R I C O
=====================
ALM LLC: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------
Debtor: ALM, LLC
DBA Agua La Montana
Los Manantiales
RD Km 4.2 rd 852
Trujillo Alto, PR 00976
Business Description: ALM, LLC is the owner of fee simple title to
a property located in Trujillo Alto, Puerto
Rico having a current value of $860,943.
Chapter 11 Petition Date: November 25, 2020
Court: United States Bankruptcy Court
District of Puerto Rico
Case No.: 20-04571
Debtor's Counsel: Mary Ann Gandia Fabian, Esq.
GANDIA FABIAN LAW OFFICE
PO Box 270251
San Juan, PR 00928
Tel: 787-390-7111
Fax: 787-729-2203
Email: gandialaw@gmail.com
Total Assets: $1,083,384
Total Liabilities: $2,919,967
The petition was signed by Kristian E. Riefkohl Bravo, president.
A copy of the petition containing, among other items, a list of
the
Debtor's 20 largest unsecured creditors is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/64YBTGI/ALM_LLC__prbke-20-04571__0001.0.pdf?mcid=tGE4TAMA
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V E N E Z U E L A
=================
CITGO PETROLEUM: Venezuela Supreme Court Sentences 6 Ex Directors
-----------------------------------------------------------------
Carlos Camacho at The Latin American Herald reports that five US
citizens and a permanent US resident were sentenced to lengthy
prison terms of between 8-13 years in jail plus a million-dollar
fines in the polemical "CITGO 6" case.
The six were at one time employees of the Nicolas Maduro regime in
the US, and it was a Maduro-controlled court that sentenced them.
CITGO, a refining company and the largest subsidiary of state-owned
oil company Petroleos de Venezuela (PDVSA) in the United States, is
since 2019 controlled by the National Assembly opposition held
legislative, whose President, Juan Guaido, claimed a year ago the
mantle of interim President of Venezuela, claiming Maduro's 2018
reelection was fraudulent and gaining recognition from 60 countries
according to The Latin American Herald.
The US' repeated plea for the six to be released was not only not
honored, but the case instead moved on to firm sentencing, the
report relays.
The press never had access to the proceedings, a violation of
Venezuelan law, and, after three years, the six were sentenced by
Supreme Court Judge Lorena Cornielles only minutes after the
closing arguments were uttered, the report discloses.
The report relays that CITGO's former president Jose Angel Pereira
Ruimwyk received the longest penalty of 13 years, while the other
five directors of the refining company were sentenced to eight
years and 10 months each. Pereira is a permanent legal resident of
the United States, while the other five convicted CITGO executives
are US citizens.
Pereira and the other "CITGO 6" arrived in late November 2017 for
what they were told was a flash CITGO official business meeting.
Police were waiting for them and they were promptly arrested inside
the boardroom, the report says. CITGO is the main oil refining
company and marketer of gasoline, lubricants and petrochemicals
Venezuela has in the United States, the report discloses.
Pereira was found guilty of "intentional embezzlement and
conspiracy of an official with a contractor," as well as the "crime
of association to commit a crime," the Supreme Court of Justice
(TSJ) reported. He will also have to pay a fine of $2 million, the
report relays.
Likewise, former directors Tomeu Vadell Recalde, Jorge Luis Toledo
Kohury, Gustavo Adolfo Cardenas Cardona, Jose Luis Zambrano Colina
and Alirio Jose Zambrano Colina all received eight years and ten
month's sentences for "conspiracy of an official with a contractor
and association to commit a crime," the report relays.
The court also ruled that all of the convicted are disqualified
"from the exercise of public service" and, therefore, "may not run
for elected office," the report notes.
The Maduro regime accused the "CITGO 6" of signing an agreement to
refinance $4 billion in CITGO debt with two companies, Frontier
Group Management and Apollo Global Management, the report notes.
The scheme was never carried out, the AP reported, the report
relays.
About CITGO Petroleum
Citgo Petroleum Corporation is a United States-based refiner,
transporter and marketer of transportation fuels, lubricants,
petrochemicals and other industrial products. Based in Houston,
Texas, Citgo is majority-owned by PDVSA, a state-owned company of
the Venezuelan government (although due to U.S. sanctions, in 2019,
they no longer economically benefit from Citgo.)
As reported in the Troubled Company Reporter-Latin America on
Troubled Company Reporter-Latin America on June 5, 2020, S&P Global
Ratings assigned its 'B+' rating and '1' recovery rating to Citgo
Petroleum Corp.'s $750 million senior secured notes due in 2025.
The '1' recovery rating indicates S&P's expectation for very high
(90%-100%; rounded estimate: 95%) recovery in the event of a
default.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Latin America is a daily newsletter
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USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T.
Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A.
Chapman, Editors.
Copyright 2020. All rights reserved. ISSN 1529-2746.
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