Mexico's Libre Abordo announces bankruptcy, termination of swap with Venezuela

Mexico-based company Libre Abordo said on Sunday it was bankrupt and that Venezuelan President Nicolas Maduro had terminated an oil-for-food agreement that had allowed the firm to supply water trucks in exchange for millions of barrels of Venezuelan crude.

Libre Abordo and its related firm Schlager Business Group threw a lifeline to Maduro late last year by trading Venezuelan crude and fuel under the oil-for-food pact, following the imposition of U.S. sanctions on Venezuela’s PDVSA in early 2019, according to documents from the state-run oil firm.

The Mexican companies said in a statement they were targets of an international political campaign, driven by the U.S. government, which had led to a loss of over $90 million and the suspension of Venezuelan crude lifting.

“In recent months (we) have faced excessive challenges, from the oil price fall ... to pressure from the U.S. government aimed at stopping our operations,” they said.

The U.S. State and Treasury Departments, helped by the FBI, have been investigating the Mexican companies to find out if they contravened sanctions imposed on PDVSA and the Venezuelan government, sources have told Reuters.

The two U.S. government departments did not immediately respond to a request for comment on Sunday.

Maduro said on Saturday that U.S. pressure had “knocked down” the oil-for-food agreements with Mexican companies, without elaborating.

The firms have defended the agreement they signed with Venezuela’s Corporation of Foreign Trade (Corpovex) by saying Corpovex had not been included in the U.S. list of sanctioned entities.

Lawyers hired by the firms also said the swap was permitted under licenses allowing supply of food and other equipment to Venezuela under humanitarian exceptions, the companies said.

“The company for years has had the intention of supporting people in need, regardless of political ideologies,” Libre Abordo said in its statement. “As part of the bankruptcy, hundreds of direct jobs will be lost.” Venezuela’s Foreign Minister Jorge Arreaza said on Sunday on Twitter that by pressing the Mexican firm, Washington is violating human rights and freedom of trade in Venezuela. “This is proof of the perverse and illegal character of the U.S. sanctions regime, showing that they lie when saying there are exceptions for humanitarian reasons.”