AMLO Says Mexico Not Canceling Contracts Amid Fight With Goldman
(Bloomberg) -- Mexican President Andres Manuel Lopez Obrador said his country isn’t in the business of canceling contracts with private companies even as he shied away from directly addressing a battle between Mexico’s state-owned power company and Wall Street giant Goldman Sachs Group Inc.
“We’re recognizing the contracts in all cases. I don’t have details about this operation. I’ll get information and I’ll provide it here, but they’re not canceling the contracts,” Lopez Obrador said, discussing the issue publicly for the first time. He spoke about the dispute between the utility he’s championed and the U.S. bank during a press conference Friday.
Goldman Sachs has been chasing after Comision Federal de Electricidad to cough up roughly $400 million from a busted natural-gas trade that went wild when a deep freeze hit Texas in February. That leaves the investment bank effectively tangling with the government to extract the payment that could ultimately be borne by Mexican households. Its inability to collect could color future dealings with similar government-backed entities around the world.
Lopez Obrador said that his government had been reaching agreements with other companies, an apparent reference to previous clashes with private pipeline operators and energy companies. He said he would call in the head of the CFE, Manuel Bartlett, to explain the dispute with Goldman to the public.
“There are talks in all of the cases, and I am happy with the attitude of the companies that are going to the Federal Electricity Commission to have a dialog and reach agreements,” he said.
The dispute has been a source of great consternation within the most senior ranks of Goldman. The bank and CFE are heading into arbitration over the matter, a spokeswoman for the utility said earlier this week, adding that “CFE considers that it has solid and sufficient arguments.”
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