Venezuela's opposition

A man counts Venezuelan bolivar notes in downtown Caracas, Venezuela January 9, 2018. REUTERS/Marco Bello/File Photo Acquire Licensing Rights

CARACAS/HOUSTON, Aug 7 (Reuters) - Groups supervising Venezuela's foreign assets plan to submit this week to the nation's congress a proposal to extend the validity of billions of dollars in defaulted bonds, the head of one of the overseeing boards said on Monday.

The country's elected opposition-led National Assembly in 2019 issued an order naming supervisory boards to look over Venezuela's foreign assets after the U.S. imposed sanctions intended to oust President Nicolas Maduro. The congress is the only one recognized abroad and has received U.S. authority to negotiate any external debt payments.

The proposal to bondholders, which would allow for payment negotiations and debt restructuring efforts, would be similar to a plan presented in March by the Venezuelan government and state oil company PDVSA to suspend statute of limitations on the debt until 2028 or until U.S. sanctions on the nation are lifted.

Since the Maduro administration is not recognized by Washington, the government's proposal has not shown much progress. An equivalent plan by the opposition-led National Assembly also would have to be green lit by the U.S.

"There must be a joint declaration over the bonds' validity by Venezuela's Committee for Administration and Protection of Assets and PDVSA's ad-hoc board, which could happen this week," said Horacio Medina, who leads the PDVSA ad-hoc board.

If the proposal is passed, the National Assembly would allow negotiations to extend the bonds' validity for five more years, according to a source involved in the talks.

Separately, PDVSA's ad-hoc board is since last year negotiating with a handful of creditors to explore payment options and avoid an auction of shares in one of the parent companies of Venezuela-owned refiner Citgo Petroleum.

Last month, a judge in Delaware gave priority to Crystallex International to cash proceeds from the proposed auction, while granting oil producer ConocoPhillips (COP.N) a position "near the front of the line."

Most bondholders will not have time enough to enforce legal action and register awards in Delaware by November to participate in the auction, but could pursue other legal strategies.

Venezuela's external debt, including PDVSA's, exceeds $60 billion. The Maduro administration halted payments to bondholders in 2017. In October, the default will have completed its sixth year, triggering legal options to claim the money.

Reporting by Mayela Armas in Caracas and Marianna Parraga in HoustonEditing by Marguerita Choy

Our Standards: The Thomson Reuters Trust Principles.

Thomson Reuters

Since 2018 Mayela has reported for Reuters on Venezuela’s economy and general news from capital Caracas. She is particularly interested in covering the effects of Venezuela’s economic crisis and high inflation, especially concerning the effects this has on the day to day lives of people and families. She also writes about how the country’s finances are managed, as well as Venezuela’s main industries. Before she joined Reuters Mayela worked at local media outlets including Cronica Uno and El Universal, and also as a Caracas-based stringer for the Wall Street Journal.Contact: +58 424-1350265

Thomson Reuters

Focused on energy-related sanctions, corruption and money laundering with 20 years of experience covering Latin America's oil and gas industries. Born in Venezuela and based in Houston, she is author of the book "Oro Rojo" about Venezuela's troubled state-run company PDVSA and Mom to three boys.

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