QUITO, Jul 30 (.) – Ecuador agreed to extend the deadline for creditors to vote on its $ 17.375 million restructuring plan until Monday, after a court hearing over a lawsuit by a small group of holders bond, the economy and finance ministry said Thursday.
The deadline that the Ecuadorian government had set for the vote ended on Friday, but at the request of the Court of the Southern District of New York that knows a lawsuit filed by the investment funds Contrarian Capital Management and GMO, it was extended until Monday.
« In an act of good faith, Ecuador agreed to extend, 24 business hours, the closing of the vote, going from Friday, July 31 to Monday, August 3, » the Ministry of Economy and Finance explained in a statement.
« The voting process is ongoing and continues in a positive way, with a high probability of reaching the necessary consent, according to preliminary reports, » he added.
The funds filed a lawsuit against Ecuador the previous day, describing as « coercive » the Government’s invitation to carry out an exchange of 10 outstanding sovereign papers for three new bonds maturing in 2030, 2035 and 2040, which was seen by the country as an « aggressive attitude ».
Ecuador said that it presented « forceful » arguments during Monday’s hearing to dismiss the petition presented by the plaintiff holders, which according to the Government have a minimum position of the total amount of the bonds under renegotiation.
The Government requires that 66% of bondholders accept their proposal in order for it to take effect, with the exception of papers maturing in 2024, where it needs 75% approval.
Ecuador’s proposal also includes a capital reduction of some 1,540 million dollars, extending the maturity of the bonds to 12.7 years and a reduction in the interest rate to an average of 5.3% from the current 9.2 %.
« We will defend the interests of Ecuadorians and we will not allow an isolated group of holders, with a petty position, to try to economically and socially harm the country, » said Economy Minister Richard Martinez, mentioned in the statement.
(Report by Alexandra Valencia, Edited by Manuel Farías)