The production of the parent company, known as Pdvsa, has been hard hit by the country’s turmoil. It is struggling to meet more than $1 billion in payments due in the next couple of months on its bonds and other obligations, including compensation for property it had nationalized. Trump administration sanctions are squeezing its ability to borrow.
If Pdvsa defaults, its collateral — Citgo — could become prey. It would be vulnerable to a takeover by creditors, with other oil companies or private equity investors watching for the opportunity to take a stake.
“The loss of Citgo would be the coup de grâce for Pdvsa,” said Gustavo Coronel, a former member of the parent company’s board. “The psychological impact for Pdvsa and the Maduro regime would be catastrophic.”
The financial impact won’t be anything to sneeze at, either.
Plus, a quick editorial check on this NYT story reveals yet another heaping dose of Sergeant Schultzism:
If I recall correctly, the NYT wasn’t so shy about using the S-word back before Venezuela’s inevitable crisis hit. Unexpectedly, of course.