Venezuelan Finmin in New York to seek financing

Tue June 3, 2003 07:14 PM ET CARACAS, Venezuela, June 3 (<a href=reuters.com>Reuters) - Venezuelan Finance Minister Tobias Nobrega is in New York seeking financial help from banks and investors to ease a fiscal crunch facing his oil-rich country following a crippling opposition strike, officials said Tuesday.

National Budget Office director, Gen. Alfredo Pardo, told the official state news agency Venpres that Nobrega was "overseas, pursuing some public credit operations".

Pardo gave no more details but a Finance Ministry source, who asked not to be named, told Reuters that Nobrega had been in New York since Monday meeting bankers and investors.

Venpres said the operations being considered by the minister could involve possible bond issues.

Nobrega has said that the government is seeking to ease a heavy concentration of debt payments this year through possible debt swaps, direct credits from banks and financing for specific projects, especially in the strategic oil sector.

Venezuela, the world's No. 5 oil exporter, is experiencing the worst recession in its recent history in the wake of a grueling strike staged in December and January by foes of leftist President Hugo Chavez.

The country is due to make debts payments totalling $960 million this month, according to official figures.

Venezuela's total external debt stands at $22.3 billion, of which $5 billion in debt payments and service falls due this year.

Nobrega has said the government wants to try to lighten the payments crunch. Internally, the government has carried out a number of domestic debt swap operations.

The opposition strike, which fizzled out in early February, disrupted oil exports, slashed government revenues and triggered heavy capital flight, forcing Chavez to introduce tight currency controls. As a result, Venezuela's economy shrank a record 29 percent in the first quarter of 2003, and unemployment and inflation have also been rising.