Billionaire Mottas Try Getting Trapped Money Out of Venezuela

Stanley Motta, chairman of Copa Holdings SA, asked Venezuela to free up $470 million of the airline’s revenue that’s trapped in the country by turning it into bonds that can be paid over time.

Currency controls have prevented Copa from converting cash from ticket sales in Venezuela into dollars for the past two years, despite promises from the government, Motta said in an interview at the Panama City headquarters of his billionaire family’s Inversiones Bahia Ltd. holding company.

“I am trying to find something that makes sense to both sides,” he said. “If they take that debt and say this is the same as having public bonds out there, and this is how we will pay it over time, and this is the institution involved, I literally think that’s the best thing for Venezuela.”

The Motta family also owns one of the businesses in Panama’s free-trade zone that say they are owed a total of about $500 million by Venezuela’s currency regulator. The quagmire for one of Central America’s wealthiest families shows how the Venezuelan crisis that U.S. President Barack Obama is trying to resolve with new outreach is spilling over into the region. The International Air Transport Association says airlines are owed a total of $3.7 billion that the government is withholding.

Just months after the administration declared Venezuela a threat to U.S. national security, it’s working to improve relations, driven by concern that upheaval there could destabilize the region.

‘Normal Relationship’

State Department officers have been meeting with officials in the leftist government of President Nicolas Maduro since April to develop what Secretary of State John Kerry has called “a normal relationship.” Falling oil prices, plummeting foreign reserves, a 68.5 percent inflation rate and growing political tensions are ravaging Venezuela. The country’s international reserves dipped to a 12-year low of $15.37 billion on July 27, according to data compiled by Bloomberg.

Venezuela and its state oil company have about $5 billion in bond payments due in the last three months of this year and about $10 billion in 2016, according to Bank of America Corp. estimates. Harvard Professor Ricardo Hausmann has said Venezuela will have no choice but to default on its debt amid shortages of staples such as medicine and milk.

Motta said a sort of “restructuring” is a way out of the standstill between airlines and Venezuela’s currency regulator.

“They told us they would allow us to convert to dollars between 90 and 120 days,” Motta said. “So what the Venezuelan government owes the private sector is convertibility. It’s been two years. I look at it as a restructuring.”

Talks Continuing

Motta said he isn’t interested in reinvesting the bolivars in Venezuela, despite offers from the government. He’s been in contact with Venezuelan officials, and the Panama government is in talks with them as well, he said.

“They tell you that you can reinvest the money but you’re not going to reinvest in something that’s not your industry,” he said.

A spokesman for the Venezuelan information ministry didn’t immediately respond to phone calls seeking comment.

Copa Holdings said in its first-quarter report that $470 million, or 41 percent, of its cash, short-term and long-term investments at the end of the first quarter were still in Venezuela pending repatriation due to government currency controls.

With his brother Alberto, Motta heads a group that shares control of Copa. The Mottas also share control of Panamanian insurer Grupo Assa SA, and has a stake in the country’s second-largest bank, Banco General SA. The family’s other holdings include Motta Internacional SA, a chain of more than 20 duty-free shops, a Panamanian TV channel, real estate throughout Central America and interests in telecommunications, logistics and information technology.

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