For third time in 4 years Russia restructures Venezuela's loan
The Russian State Duma at a meeting on Tuesday ratified a bill to restructure the loan issued to Venezuela.
The third restructuring in the last 4 years will again delay the repayment of the debt principal, which at the beginning of this year was $3.4 billion.
In the next three years, Venezuela will repay only interest on the loan - two tranches a year for 66.5 million dollars each, according to a document posted on the Duma’s website.
Debt payments are postponed to 2023-26. During this period, the size of the semi-annual tranche increases to $342 million, and annual payments, respectively, to 684 million dollars. The final payment is due on September 30, 2026.
The protocol on the restructuring of Venezuelan debt, which was has been on the balance sheet of the Russian Finance Ministry for almost 10 years, was signed in Moscow in August 2018.Two months later, a new, relaxed repayment schedule started being used. Nevertheless, the agreements required ratification at the level of the parliaments of the two countries.
Venezuela completed all procedures on June 3 this year, said Yuri Oleynikov, the first deputy chairman of the Duma Committee for International Affairs. Once the bill is approved by the Duma, all legal formalities can be considered complete.
Russia provided Venezuela with a $4 billion loan in 2011 to finance the supply of Russian industrial products. Three years later, amid the collapse in oil prices, Venezuela asked for an extension of the loan.
In 2016, the Russian government approved debt restructuring, which by then had fallen to $2.84 billion. It was to be paid off in equal tranches in 2019-22.
But the crisis in the Venezuelan economy, which during Maduro's presidency lost 40% and more than 70% of oil production, also thwarted this plan. In November 2017, Maduro, during a meeting with Russian President Vladimir Putin, agreed on a new postponement of repayment - until 2026.
The debt had grown to $3.15 billion and then another $250 million.
Russian Deputy Finance Minister Timur Maksimov, speaking at the State Duma, assured the deputies that Maduro was transferring money according to schedule.
"Until now, all payments are fully serviced and repaid. There are no overdue liabilities," Interfax quoted Maksimov as saying.