VENEZUELA TO ANNOUNCE NEW DEBT CONVERSION PLAN
venezuela will shortly announce a new
plan to allow private companies to repay their foreign debts
with equity and for public debt to be converted into private
sector investments, cntral bank president hernan anzola said.
    Anzola told a meeting of the banking association yesterday
the new plan, to be called exchange agreement no. 4, will be
announced in mid-april.
    He said it will allow foreign creditors to convert unpaid
private sector debts into bolivar-denominated shares of stock
in the debtor companies. the plan would be similar to those
already in effect in other latin american nations, he said.
    at least a half dozen such debt-equity swaps have already
taken place in venezuela. In 1984, a group of 17 U.S. Banks led
by citibank converted 18.3 mln dlrs of debt from the cervecera
nacional, into 30 pct of the beer company'stock.
    Anzola said exchange agreement no. 4 will also allow for
conversion of public sector debt into investments in venezuelan
private industry.
    Holders of venezuelan public debt bonds would be able to
exchange them for bolivar-denominated bonds at up to 100 pct of
their nominal value, which could be turned into private
investment in priority areas.
    This, anzola said, would mean a reduction in the amount of
the public sector debt and an increase in foreign investment.
He stressed that the public sector debt bonds will not be
exchanged for shares of stock in state-owned companies.
    Anzola said exchange rates for these transactions will
depend the type of investment the creditor intends to make,
with export-oriented companies to be favored.
    Venezuela issued a new plan in december for the repayment
of 7.8 billion dlrs in private sector foreign debt. Under the
scheme, debtors are able to buy dollars at the preferential
7.50 bolivars rate, but must also pay a premium.
 Reuter
