November 1, 2013 / 5:04 PM / 6 years ago

Mexico says it will waive most of $487 million debt owed by Cuba

Mexico's Finance Minister Luis Videgaray addresses the audience during a forum organized by Mexico's Central Bank in Mexico City October 14, 2013. REUTERS/Tomas Bravo

MEXICO CITY (Reuters) - The Mexican government is ready to waive 70 percent of a debt worth nearly $500 million (313.9 million pounds) Cuba owes it, Finance Minister Luis Videgaray said on Friday, as Mexico seeks to improve ties with the communist island.

Speaking on Mexican radio, Videgaray said a loan issued by Mexico’s foreign trade development bank Bancomext to Cuba more than 15 years ago had become a debt worth $487 million.

“Seventy percent of the debt is to be waived,” Videgaray said, adding that a formal announcement would be made later.

The rest of the debt will be paid in 10 years, he added.

Relations between Cuba and Mexico were traditionally strong, but they soured during the rule of the conservative National Action Party between 2000 and 2012.

Ties reached a nadir in 2002 when Cuba’s Fidel Castro revealed how then-Mexican President Vicente Fox had told him to leave an international summit early after eating his lunch so he would avoid an overlap with then-U.S. President George W. Bush.

The Institutional Revolutionary Party (PRI), which ruled the country between 1929 and 2000 and regained power last year, is keen to establish an influential relationship with Cuba as Fidel and his successor, his brother Raul Castro, advance through their 80s.

Videgaray said it was important to resolve the debt issue so that “things would flow well” between the two countries.

Reporting by Veronica Gomez; Editing by Vicki Allen

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