Report: Legal, Financial Advisers Begin Talks with Creditors

The two US-based firms to act as legal and financial advisers on Lebanon’s public debt restructuring began negotiating with major creditors abroad after the government decided to default on its $1.2 billion Eurobond debt, al-Joumhouria daily reported on Friday.

The daily said that financial adviser and asset management firm Lazard Cleary Gottlieb Steen, and legal adviser on the country's Eurobond debt Cleary Gottlieb Steen & Hamilton LLP, began talks mainly with Ashmore Group Plc, Fidelity Investments and Goldman Sachs.

It is not yet known whether the creditors will initiate lawsuits, said the daily, because Lebanon is actually in the stage of suspending the payment of its debt.

Earlier in March, Prime Minister Hassan Diab said the government will suspend payment of $1.2 billion in loans, marking the crisis-hit country's first-ever default on its sovereign debt amid ongoing popular unrest.

He said the country will seek to restructure its massive debt.

The default marks a new chapter in the crisis and could have severe repercussions on Lebanon, risking legal action by lenders that could further aggravate and push Lebanon's economy toward financial collapse.