
{"id":264735,"date":"2023-02-08T11:10:41","date_gmt":"2023-02-08T16:10:41","guid":{"rendered":"https:\/\/oncubanews.com\/en\/?p=264735"},"modified":"2023-02-08T11:10:41","modified_gmt":"2023-02-08T16:10:41","slug":"cuba-willing-to-negotiate-its-debt-with-legitimate-creditors","status":"publish","type":"post","link":"https:\/\/oncubanews.com\/en\/cuba\/cuba-willing-to-negotiate-its-debt-with-legitimate-creditors\/","title":{"rendered":"Cuba willing to negotiate its debt with \u201clegitimate\u201d creditors"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Cuban Minister of Justice Oscar Manuel Silvera affirmed in statements to the <\/span><i><span style=\"font-weight: 400;\">Financial Times<\/span><\/i><span style=\"font-weight: 400;\"> that Cuba is willing to talk with \u201clegitimate\u201d creditors about the payment of its foreign debt worth millions of dollars.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cOur country\u2019s position is that we recognize our legitimate debts and our legitimate creditors. Our position is first of all to recognize them, to be transparent, to always speak with our creditors and to seek terms that are mutually favorable to comply with these obligations,\u201d Silveira explained to the British newspaper.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">These statements come when the hearing in the High Court of <\/span><a href=\"https:\/\/oncubanews.com\/en\/tag\/cuba-and-united-kingdom\" target=\"_blank\" rel=\"noopener\"><b>England<\/b><\/a><span style=\"font-weight: 400;\"> ended a few days ago, where a dispute is being settled over several debt securities claimed by the investment fund CRF I Limited to Cuba for a value of about 72 million dollars.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">According to the <\/span><i><span style=\"font-weight: 400;\">FT<\/span><\/i><span style=\"font-weight: 400;\">, the private sector bondholders, who are owed an estimated $7 billion of Cuban debt, say the island\u2019s government has for years obstructed their negotiation proposals.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">In 2015, the Cuban government reached an agreement with the Paris Club of creditor nations to cancel more than three quarters of the debt that the country had at that time, but this step has not materialized with the private creditors.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">According to the article, international investors would consider a restructuring agreement with private creditors as a precondition for Cuba to regain access to financial markets to access credit, after a decades-long absence.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Without that possibility, the battered Cuban economy would have a much more difficult time reversing the deep crisis it is going through, which has worsened due to the impact of the COVID-19 pandemic, the sanctions imposed by the United States and the ineffectiveness of the measures adopted to overcome the complex economic situation.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The Cuban debt is barely quoted on secondary markets due to a lack of demand. In addition, the sanctions that the U.S. administration has imposed on the island&#8217;s government prevent the funds and citizens of that country from buying it. When traded, it gets less than 10 cents on the dollar, the <\/span><i><span style=\"font-weight: 400;\">FT<\/span><\/i><span style=\"font-weight: 400;\"> reported.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Cuba\u2019s immediate challenge is to resolve its <\/span><a href=\"https:\/\/oncubanews.com\/cuba\/fondo-crf-i-admite-que-adquirio-deuda-cubana-para-iniciar-demanda-por-impago\/\" target=\"_blank\" rel=\"noopener\"><b>legal battle with the CRF I fund<\/b><\/a><span style=\"font-weight: 400;\">, registered in the tax haven of the Cayman Islands. The government is reluctant to recognize it as a legitimate creditor, and therefore pay a million-dollar figure for a debt derived from loans issued by two European banks in 1984.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">After the hearing is over, Judge Sara Cockerill, of the Commercial Division of the High Court of London, must decide if CRF I is a legitimate creditor of the Central Bank of Cuba (BCC) and of the Republic of Cuba, from where it is argued that this fund irregularly acquired the cession of the rights to that debt, held by the ICBC Standard Bank, a British subsidiary of the Chinese bank ICBC.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A resolution of the case pending ruling in favor of CRF I could pave the way for other private sector creditors to sue the Cuban government.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cCRF is not our creditor and never has been because they did not validly acquire this debt.\u2026 We maintain that there was a proven case of corruption in this area,\u201d Silvera said.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Cuban citizen Ra\u00fal Olivera Lozano, who was director of Operations of the BCC, was sentenced in Cuba to 13 years in prison for his role in the matter.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Last week Olivera testified online before the court in London and \u201cclearly explained how these unfortunate events unfolded,\u201d added the Cuban minister.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">David Charters, president of CRF, also explained at trial that he had repeatedly tried to negotiate a debt restructuring in a mutually beneficial manner.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cWe put some pretty imaginative suggestions on the table. But they completely ignored the proposals or simply rejected them out of hand,\u201d the executive told the <\/span><i><span style=\"font-weight: 400;\">FT<\/span><\/i><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">CRF has dismissed the bribery allegations, and its lawyers pointed out in arguments in the London court that Cuba withdrew them from its legal case just before proceedings opened, which they described as \u201ca belated acknowledgment of the extremely serious allegations made that were baseless and should never have been done.\u201d<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Silvera, however, said that Cuba \u201cdid not ask the British judge to prove that there had been corruption\u2026because that has already been proven in Cuba.\u201d<\/span><\/p>\n<p><span style=\"font-weight: 400;\">John Kavulich, head of the U.S.-Cuba Economic and Trade Council, a private non-profit group, believes that the London trial \u201cmatters much more than most people are appreciating,\u201d according to the outlet.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cWhat this lawsuit and trial have done is draw attention to how much Cuba owes, that it doesn\u2019t pay what it owes, and that it is fighting over paying what it owes. From a marketing standpoint, it\u2019s a disaster,\u201d adds Kavulich added.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For his part, Cuba\u2019s First Deputy Minister of Finance and Prices Vladimir Regueiro, also in London for the court hearing, told the <\/span><i><span style=\"font-weight: 400;\">FT<\/span><\/i><span style=\"font-weight: 400;\"> that his government \u201cwas always ready to hold the best negotiations to find the terms and conditions that fit the current conditions of our economy\u201d with the creditors \u201cwho legitimately hold the title.\u201d<\/span><\/p>\n<p><span style=\"font-weight: 400;\">CRF is part of a group of creditors that owns $1.4 billion of Cuban debt. The fund reportedly made a proposal to restructure the Cuban debt in 2018 but received no response from Havana. The group includes two other funds, the Stancroft Trust and Adelante Exotic Debt, the <\/span><i><span style=\"font-weight: 400;\">FT<\/span><\/i><span style=\"font-weight: 400;\"> said.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The coronavirus pandemic caused an 11 percent drop in Cuba\u2019s gross domestic product in 2020, Regueiro said. Growth has been slow since then, while annual inflation is around 40%, the media recalled.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">At the same time, the \u201cunprecedented\u201d tightening of U.S. economic sanctions against Cuba under the Trump administration severely affected the economy, Regueiro said.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cHowever, ratifying that position of recognizing the debts that our government has, there have been important negotiations at the level of companies, institutions [and] directly between banks\u2026and with the government as well, with other sovereign governments,\u201d he added.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">He pointed out in the article that CRF began to build positions in the Cuban debt starting in 2009, buying in the hope of profiting from a future restructuring.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cWe have been accused of being a vulture, but if we wanted to be aggressive, we could have litigated the entire portfolio.\u2026 We could have fired a volley of $1.3 billion and we didn\u2019t,\u201d Charters argued.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">According to the article, the litigating fund had suggested that Cuba negotiate a cash sum for the two pieces of debt in dispute, with a large reduction in the amount owed and financing for payments from a surcharge on visiting cruise ships or planes.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A verdict is expected in about three months, but the losing party could appeal to a higher court, the <\/span><i><span style=\"font-weight: 400;\">Financial Times<\/span><\/i><span style=\"font-weight: 400;\"> warned.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Cuban Minister of Justice affirmed to the \u201cFinancial Times\u201d that Cuba\u2019s position is to talk and seek terms that are mutually favorable to fulfill its obligations with creditors.<\/p>\n","protected":false},"author":3134,"featured_media":264737,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[13902],"tags":[33103,14816,29340],"ppma_author":[33546],"class_list":["post-264735","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cuba","tag-cuba-and-united-kingdom","tag-cuban-economy","tag-cuban-external-debt"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Cuba willing to negotiate its debt with \u201clegitimate\u201d creditors | OnCubaNews English<\/title>\n<meta name=\"description\" content=\"The Cuban Minister of Justice affirmed to the \u201cFinancial Times\u201d that Cuba\u2019s position is to talk and seek terms that are mutually favorable to fulfill its obligations with creditors.\" \/>\n<meta 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