April 9, 2019 / 3:59 PM / 3 months ago

Fund sues Venezuela for $26 million in unpaid bonds, interest

CARACAS, April 9 (Reuters) - Global fund manager Pharo has sued Venezuela for $26 million in unpaid bond principal and interest, a U.S. court filing showed, as legal claims by creditors piled up against the OPEC nation whose economy is suffering from a hyperinflationary collapse.

In a complaint filed with the New York State Supreme Court late on Monday, Pharo said two funds that it controls own $1.5 million in bonds that matured in 2018 and more than $200 million in bonds set to mature in October 2019. Venezuela failed to pay interest and principal on the 2018 bonds and missed three interest payments on the 2019 bonds, it added.

Pharo manages around $10 billion from offices in London, New York and Hong Kong, according to its website.

Venezuela’s information ministry did not respond to a request for comment.

The government of President Nicolas Maduro stopped making payments on nearly all bonds issued by the South American country and state oil company Petroleos de Venezuela last year, and has accumulated some $8 billion in pending interest and principal.

Investors had taken few concrete actions in response to the default until last December, when a group of creditors demanded payment on a $1.5 billion bond, though they did not take the claim to court. Later that month, a little-known Florida firm sued Venezuela for $34 million in defaulted bonds.

A group of bondholders in January said they would not negotiate a potential restructuring of debt with Maduro, saying the opposition-controlled National Assembly was the country’s “only legitimately elected body.” Western countries and the domestic opposition deride Maduro’s 2018 reelection as a sham, while Maduro, a socialist, argues Venezuela is the victim of a U.S.-led “economic war.”

Maduro in 2017 invited creditors to a brief meeting in Caracas to discuss a potential debt renegotiation, but no agreement was reached, and sanctions placed on Venezuela by the United States will complicate any effort to reach an agreement. (Reporting by Luc Cohen; Editing by Richard Chang)

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