Argentina to Evacuate Crew From Seized Tall Ship

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October 22, 2012

The ARA Libertad

BUENOS AIRES–Argentina has decided to evacuate the crew of the naval training ship ARA Libertad, which has been detained in a port in Ghana since Oct. 2 due to a court order obtained by creditors seeking to collect on defaulted Argentine bonds.

The order prevents refueling, endangering the safety of the crew by blocking the operation of the generators needed for everything from cooking to fire prevention, Argentina’s foreign ministry said in a statement Saturday.

Only the captain and a skeleton crew will remain with the ship. The boat currently has 326 people aboard, including guests from Brazil, Chile, Uruguay, Paraguay, Venezuela, Ecuador, Bolivia and South Africa.

On Oct. 2, Ghana commercial court judge Richard Adjei-Frimpong ordered the 130-meter long ARA Libertad held at the Port of Tema until Argentina honors U.S. judicial rulings that awarded about $1.6 billion to Elliott Management Corp.’s NML Capital Ltd.

Argentina’s government has sent defense and foreign ministry officials to Ghana to attempt to negotiate the ship’s release. Foreign Minister Hector Timerman will also travel to New York for a meeting Monday with the head of the United Nations Security Council, the ministry said.

Argentine officials have repeatedly slammed the Ghanaian court and ruled out negotiations with NML Capital, which it calls a “vulture fund.”

The ship seizure is “no more nor less than kidnapping, extortion and a act of piracy,” the foreign ministry said.

NML says that Argentina has the option of depositing $20 million with the court and taking away the ship, but Argentine officials have vowed to fight the seizure in Ghanaian courts and international forums.

The ship left Argentina in June to visit ports in the South Atlantic, Caribbean, Europe and Africa. It was scheduled to return to Buenos Aires Dec. 8.

The incident has been a severe embarrassment for Argentina and the chief of the navy was replaced last week amid finger pointing over who was to blame for allowing the ship to be seized.

Admiral Carlos Alberto Paz was replaced by the navy’s No. 2 officer, Vice-admiral Daniel Alberto Martin.

Earlier, the navy’s general secretary, Rear Admiral Luis Maria Gonzalez Day, and commander Alfredo Mario Blanco, were suspended pending the results of a government investigation.

Argentina’s dispute with investment funds stems from its $100 billion sovereign default in 2001. The South American nation managed to restructure about 93% of its defaulted bonds in debt exchanges in 2005 and 2010 that offered investors about 33 cents on the dollar.

Some $4.5 billion of defaulted bonds are in the hands of so-called holdouts like Kenneth Dart’s EM Ltd. and NML Capital Ltd. funds.

-By Shane Romig. (c) 2012 Dow Jones & Company, Inc.


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