Russia Sends Team to Venezuela to Help Draft Rescue Plan

(Bloomberg) -- Russia has sent a senior delegation to Venezuela to consult high-ranking government officials on a plan to stem the brutal economic collapse in a key Kremlin ally.

Venezuela is reeling from the impact of U.S. sanctions and low oil prices. Russia, which has maintained close ties with the leftist government of President Nicolas Maduro and provided a lifeline in the form of a $3.15 billion debt-rescheduling a year ago, is offering technical assistance at present.

The Russian delegation, including Deputy Finance Minister Sergey Storchak, will meet with local officials to help devise strategies to manage the economy in the current crisis, Finance Ministry spokesman Andrey Lavrov said. He declined to elaborate on the possibility Russia might provide more financial support.

The Russian team will “provide assistance to Venezuela in developing measures to manage the economy in a crisis situation,” he said, without giving further details.

PDVSA Meeting

The Russian delegation plans to meet the central bank, and Finance and Economy Ministry in Caracas on Monday to discuss ways to rebuild Venezuela’s depleted international reserves, the country’s crypto-currency efforts and other fiscal and monetary topics, according to two people familiar with the plans, which aren’t public. The Russian officials will also meet with Petroleos de Venezuela SA to discuss its sales of foreign currency to the central bank on Tuesday. The delegation may meet President Maduro as well, one of the people said.

Venezuela’s state TV showed images of Russian officials meeting with Vice President Delcy Rodriguez, Finance Minister Simon Zerpa and Central Bank President Calixto Ortega in Caracas on Monday, without adding any more details. Maduro may visit Russia at the end of November, RIA Novosti news service reported earlier this month.

A Chinese delegation is also in the Venezuelan capital for talks on steadying the economy, Russian officials said. The Chinese embassy in Moscow didn’t immediately respond to a request for comment.

PDVSA is preparing to make a $949 million bond payment due Monday. The socialist state is behind on almost $7 billion in debt payments owed to investors, but this bond is backed by a valuable asset -- a majority stake in Citgo Holding Inc. -- meaning a non-payment would allow holders to lay claim to that.

Press officials for Venezuela’s Information Ministry, presidency and PDVSA declined to comment Monday.

Russia, also subject to U.S. sanctions, has been cautious about funding its struggling foreign allies, despite repeated appeals.

©2018 Bloomberg L.P.