Investor demands $20 million for tall ship; Argentina says Ghana ruling could harm relations

ACCRA, Ghana – International investors put a $20 million price tag on an Argentine navy training ship Thursday after a judge in Ghana ruled that the ARA Libertad cannot set sail until the South American country settles claims for unpaid debts.

The U.S. creditors are demanding payment in full on Argentine bonds for which most investors accepted 30 cents on the dollar in 2005.

Justice Richard Agyei-Frimpong had ordered the tall sailing ship held at Tema harbor days earlier after creditors cited judgments in the U.S. and Britain approving the seizure of Argentine assets anywhere in the world. On Thursday, he said Argentina failed to persuade him to remove the injunction.

Argentina's government said the ruling violates international norms as well as rulings by judges in the U.S., Germany and France that found Argentine military vessels immune from the seizures.

The ruling "compromises Ghana's international responsibility, adding a political dimension to the judicial case that affects bilateral relations," Argentina's defense ministry said. It said the country's deputy defense minister and foreign minister would travel to Africa to discuss the matter with Ghana's highest authorities.

The case was brought by NML Capital Ltd., a subsidiary of the Elliot Capital Management fund run by billionaire Paul Singer, who leads a group of holdouts demanding payment in full plus interest for Argentine bonds bought at fire sale prices after Argentina's economy collapsed in 2002. Some 93 percent of bondholders accepted pennies on the dollar seven years ago, but Argentina has failed to come to terms with the holdouts.

Singer "has boasted of having always won with his strategy of buying debt in default so that he can later multiply geometrically his investment. The immorality of this usurious practice" has been particularly harmful to African countries, the Argentine foreign ministry said in a statement Thursday.

The three-masted training vessel Libertad came to Ghana on a goodwill mission as part of a West African tour with hundreds of navy cadets from Argentina, Chile, Uruguay and Peru. Chile's government said Thursday it was keeping in contact with the Argentine navy and their cadets' families as the situation developed.

Luis Suarez, a cadet working in the ship's galley, told an Argentine radio station that they access to Internet and phones and can communicate with their families back home. He said that there is food aboard the ship and the crew rode buses into town to buy things, but that their movements are restricted.

"We are not freely circulating," Suarez said.

NML now plans to seek an auction of the ship, which it hopes will pressure Argentina to post a bond in Ghana reflecting the vessel's value. At that point, the ship and its crew would be able to leave port, Argentina would forfeit the bond, and NML would collect the money.

NML's lawyer, Ace Anan Ankomah, said his side filed a motion saying "you know what, our claim is all about $350 million, but if you post a bond of $20 million, we will agree with you and go to court, that the vessel can leave. So we are waiting to hear from them."

Argentina responded that it won't bend.

"Argentina will exhaust all judicial possibilities in Ghana and in international courts in defense of its sovereignty, against the vulture funds and those who try to impose a global system in which people's lives are subjected to the speculation of capital," the foreign ministry said.

Robert Raben, director of the American Task Force Argentina, a Washington lobbying group representing bondholders, said the people of Ghana will benefit from Thursday's ruling.

"As a country upholds the rule of law, investment increases and the economy grows. This is precisely the opposite direction that Argentina has gone — repudiating debt that it has the ability to pay," Raben's statement said. "As a result of these policies, investment into Argentina has evaporated, and it has become isolated from the international community."

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Associated Press writers Almudena Calatrava and Michael Warren in Buenos Aires contributed to this report.