By Hugh Bronstein
BUENOS AIRES (Reuters) - Argentina is planning to amend its offer to creditors to restructure $65 billion in foreign debt, with talks on a positive course despite there being an "important distance" left to cover, Economy Minister Martin Guzman told Reuters.
The negotiations, which are at a pivotal stage, are key to Argentina averting a hard default that would risk locking the grains producer out of international capital markets as its already fragile economy suffers from the coronavirus pandemic.
The South American country's government on Thursday extended a deadline for talks until June 2 after an initial restructuring offer failed to gain sufficient support. The country is also expected to miss bond payments due on Friday.
Guzman told Reuters in messages late on Thursday that the deadline extension would give the government time to revise its deal on the basis of discussions with creditors that he expected to take place in coming days.
"We are planning to make amendments with the goal of achieving a sustainable deal with our creditors," he said.
"We extended the offer so we can gain some time to make those amendments, and those will be determined in the process of negotiations over the next days."
The government and creditors had exchanged proposals over the last month, with both sides recently signaling a willingness to find middle ground and avoid a messy standoff.
Argentina is keen to turn the page on a history of defaults, with a major one in 2001 leading to over a decade of acrimony with creditors that was only fully resolved in 2016.
The country could enter a ninth sovereign default on Friday, when it faces the end of a 30-day grace period for around $500 million in bond payments. Guzman declined to comment on whether the government would make the payment.
Guzman said there was an "increasing mutual understanding" with creditors, even if there remained work to be done.
"There is still an important distance to cover but all sides are at the table trying to find a solution," he said.