With this, Ecuador would not complete the restructuring that was announced by the Minister of Finance and President Moreno earlier this month.
On July 29, two groups of bondholders, Contrarian Capital and GMO LLC, filed a lawsuit against Ecuador to block the renegotiation of the debt.
According to Bloomberg information, Contrarian Capital is seeking to sue the country in one of the New York courts and has called the debt restructuring plan “extremely coercive.” To this resource, GMO LLC would be added, which also disagrees with the proposal of the Ministry of Finance.
The recourse filed by the creditors is similar to a protection action to stop a process, so the court must urgently rule, but this action is given two days after the deadline for the debt holders to accept the proposal made by the Ecuadorian Government.
Creditors have until 11:00 on Friday, July 31, 2020 to submit their formal acceptance.
It should be remembered that a few days ago, the Ministry of Finance indicated that bondholders seek unfair advantage and debt renegotiation would be in danger.
The two plaintiffs are part of the minority creditor groups that rejected Ecuador’s offer.
Ecuador requires 66% approval to renegotiate nine bonds and comply with the government’s announcement earlier this month, at the moment, it would only have 53%. Also, for 2024 bonds, 75% approval is required.
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