Bloomberg — Suriname expects to reach a restructuring agreement with China in November, the final step in the South American nation’s debt negotiations, according to President Chandrikapersad Santokhi.
In an interview with Bloomberg in New York, Santokhi said his minister of foreign affairs will travel to China in November to “find a solution” to negotiations that have taken “too long.” The government made an offer to China more than a year ago to rework around $545 million it owes, according to the IMF.
“All signals that we are getting are that we are coming very close to a debt restructuring,” Santokhi said at the Council of the Americas following a meeting with investors. “China is now in a better position to decide than a couple of months ago.”
An agreement with China is the last piece of the puzzle in getting Suriname out of default more than three years after it started missing payments. The country finds itself potentially on the verge of becoming an energy exporter after oil discoveries were made in the Atlantic Ocean — not far from Guyana, where Exxon Mobil Corp. is already producing.
Santokhi said he wants to bring in foreign investment on the back of that discovery. He has already struck deals with private creditors, India and the Paris Club aimed at allowing it to regain access to international capital markets.
In its negotiations with Chinese lenders, Santokhi’s government is seeking to change some terms on loans, which already carry low interest rates. Whatever deal it makes will be consistent with conditions set under the International Monetary Fund’s lending program to the country, he said.
Oil windfalls
Meanwhile, Suriname expects to carry out the final steps of its debt exchange with bondholders soon, after striking an agreement in principle in May with a key group of investors to restructure $675 million of defaulted global debt, according to Minister of Foreign Affairs Albert Ramdin.
A new bond issuance is set to include both dollar notes and a special security that pays out if the government gains eventual access to oil revenues. TotalEnergies SE and APA Corp. said in early September that an offshore reserve known as Block 58 hold close to 700 million barrels of oil. The companies expect to make a final investment decision by the end of 2024.
Revenues from oil royalties will go toward a sovereign wealth fund and be invested to diversify the economy, including spending on agriculture, food security, health, education and security, Santokhi said. Some of the money will also be injected into real estate and infrastructure development.
Santokhi said he aims to make Suriname a “hub” for exports by connecting the isolated, jungle-covered country to neighboring countries of Guyana and Brazil.
“With this oil discovery, now everyone believes that it’s not just a story because the story was told for so many years,” said Santokhi. “Now it’ll happen.”
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