MOSCOW – Venezuela has struck a payment restructuring deal for its more than $3 billion debt with Russia, officials said on Wednesday.
Russia’s Finance Ministry said in a statement that restructuring would allow Venezuela to pay its consolidated $3.15 billion debt back over a 10-year period with minimal payments over the first six years.
“Debt relief provided to the Republic as a result of debt restructuring will allow it to allocate funds for the development of the country’s economy, improve the debtor’s solvency and increase the chances of all creditors to return loans previously granted to Venezuela,” the Ministry added.
Standard & Poors, a rating agency, declared on Monday the crisis-hit nation to be in selective default after it failed to pay $200 million due on its foreign debt.
Meanwhile, other prominent rating agencies warned that the state oil company PDVSA had also defaulted.
Venezuela’s Finance Minister Simon Zerpa and Agriculture Minister Wilmar Castro Soteldo both traveled to Moscow to strike the debt accord and are expected to divulge further information on the details of the deal later.
Towards the end of 2011, Russia granted Venezuela around $4 billion worth of credit for arms purchases, which Caracas had been paying off on time until March 2016, when complications arose.
The oil-rich South American republic has in recent months been gripped by a violent and sometimes deadly political crisis resulting in mass protests against the ruling government of President Nicolas Maduro, whose opposition accuse him of authoritarianism.
Venezuela, whose socialist government is subject to United States sanctions due to the turmoil, remains one of Russia’s closest allies in the region.