Cuba says vulture fund seeking 72 million euros never a creditor as UK court begins proceedings

Cuba says vulture fund seeking 72 million euros never a creditor as UK court begins proceedings

HAVANA (Reuters) – Cubas Central Bank on Friday lashed out against a “vulture fund” seeking to cash in on unpaid government debt lingering from the era of former leader Fidel Castro, calling illegitimate its claims against the Communist-run island in a London court.

CRF I Ltd, an investor in defaulted Cuban sovereign debt since 2009, filed the case in Britains High Court after Havana refused a debt relief offer made by CRF and some other bond holders back in 2018.

Such firms, described as “vulture funds” by the Cuban Central Bank, typically purchase distressed or defaulted debt then sue in international courts to get paid in full.

Cubas Central Bank (BNC) said in a statement on Friday it does not recognize CRF as a creditor.

“CRF is not a creditor of the BNC or of Cuba and never has been,” the Central Bank superintendent said.

CRF could not immediately be reached for comment on Friday.

The firm claims Cuba owes it 72 million euros in debt in proceedings currently under way in the London court, according to the Central Bank statement.

The case will be closely watched by Cubas creditors, some of whom have struggled to recoup loans as the country wrestles with a dire economic crisis made worse by the coronavirus pandemic and restrictions put in place by former U.S. president President Donald Trump.

“The BNC and Cuba have never ignored their debts and have always maintained their interest in negotiating with their legitimate creditors,” the bank said in its statement.

Other Latin American nations, most notably Argentina, have fought prolonged court and political battles for years to settle with so-called vulture funds.

(Reporting by Dave Sherwood; Editing by Sandra Maler)