An Argentine bondholder was tied up in knots yesterday waiting to get some compensation for the losses on bonds he held at the time of the crash in 2001.
Stefan Engelsberger, a leading activist for bondholders who lost out in the 2001 default, dramatized his plight by staging an “art performance” in the protest area of the Suntec convention centre.
Englesberger lay on the floor writhing occasionally, handcuffed, with his legs bound together with broadband cable and a bag over his head. Strewn about on the floor next to him were crumpled and torn copies of the world’s leading financial media and a battered copy of an IMF report, The IMF and Argentina, 1991-2001.
Engelsberger is proposing a new scheme to repay bondholders, many Europeans like himself, who lost all in the historic moratorium, when the government defaulted on $85 billion .
Hedge fund strategies should be combined, Engelsberger says. IDistressed funds plus direct investment strategies could be combined. A fund would be created, made up of old Argentine bonds that would be supplemented with an additional cash payment of 10%, Engelsberger proposes. The IMF and World Bank could help bring parties together for the fund, he suggests.
Hundreds of thousands of individual bondholders were left holding worthless paper. They and several institutional holdouts are still waiting for negotiations and a settlement that would pay them for at least part of the value of their bonds.
Engelsberger has received no response from Argentine officials despite repeated attempts to engage them in talks, he told Emerging Markets.