By KELIN DILLON
Global investment bank Goldman Sachs launched an international lawsuit against Mexico’s state-owned Federal Electricity Commission (CFE) for its apparent debt, to the sum of $400 million.
The CFE allegedly defaulted on payments for a natural gas purchase during last February’s gas pipeline freeze, which affected Texas and Northern Mexico, resulting in the suit.
“The Federal Electricity Commission will reserve information on the details of the arbitration, until the ruling is issued. It does not want to inform before so as not to hinder any process,” said Manuel Bartlett, CEO of the CFE.
“The CFE has argued that it should not have to honor the contract due to extreme and unpredictable price action.”
The Goldman Sachs and CFE agreement tied the former to the monthly gas price index, while the latter was held responsible for daily rates, which shot up more than 100 times the usual price during February’s freeze.
Reports say the suit stems from Goldman holding Mexico’s electric company to its contractual obligations, which are not contingent on natural disasters.
If the CFE declines to pay its debt, it runs the risk of becoming blackballed from Wall Street, creating complications for the company’s future access.