Argentina called on bondholders to give the country more time to repay about $12 billion in debt still owing from its 2001 default as a court hearing prevents the government from making the payment within the deadline.
The New York Appeals Court will begin to hear the case on April 13, one day before Argentina has to make the payment.
It’s up to the litigators led by Paul Singer’s Elliott Management to agree to an extension of the deadline or risk the collapse of the accord, Finance Minister Alfonso Prat-Gay said on Tuesday.
“It’s their option to stay in the deal or to leave the deal,” Prat-Gay said during a Bloomberg Argentina Summit in Buenos Aires.
Argentina’s congress approved last week a bill that allows the nation to settle a 15-year legal battle with creditors who refused to take part in a debt restructuring program following the 2001 default.
The package of measures, which included the repealing of some debt laws, also specified that injunctions imposed by the court preventing Argentina from paying owners of restructured bonds must be lifted before the deal can be sealed.
The default on $95 billion of debt was at the time the biggest in history. A New York court ruled in 2012 that Argentina couldn’t pay other bondholders until it paid the holdouts, sparking a second default in 2014.
Closing the agreement with the holdouts will mark the end of the first stage of President Mauricio Macri’s bid to unwind many of the previous government’s economic policies, Prat-Gay said.
In just over three months, Macri has lifted capital controls, devalued the peso, eradicated export tariffs on most agricultural products, reduced subsidies on utilities, and ordered the overhaul of economic statistics whose inaccuracies led to censure by the International Monetary Fund.