The Mexican government will pay $485 million plus interest starting Thursday to former shareholders of 11 banks nationalized a year ago, the Finance Ministry announced today.
Compensation will be made by issuing government bonds to the former stockowners. The bonds are redeemable for cash in seven annual installments beginning in 1985, which means that the shareholders will be fully reimbursed only in 1992.
By announcing the compensation package, the government effectively guaranteed that last year's surprise nationalization by outgoing president Jose Lopez Portillo cannot be reversed through lawsuits or other legal maneuvers. Some former shareholders have taken the government to court, charging that the nationalization was unconstitutional.
While President Miguel de la Madrid was believed to have been unhappy with his predecessor's action in nationalizing the banks, a reversal would create serious political problems for him with the left wing of his own Institutional Revolutionary Party and with left-wing opposition parties. Some critics have urged the government not to compensate the banks' shareholders at all, accusing the banks of exporting large sums of money to more secure havens in the United States and thus contributing to Mexico's financial difficulties.
"The idea in the compensation is to do it now, to do it early, and present both businessmen and the left with a fait accompli," said a government banking official who asked to remain anonymous.
The compensation package does not cover all of the banks that were nationalized, but the 11 held 73 percent of the assets of the nationalized institutions. Terms for the remaining banks will be set later.
The announcement of the compensation package came as de la Madrid tried to tie up loose ends involving the economy before his first state of the union address on Sept. 1. The president is expected to stress the progress that his government has made in handling the worst financial crisis in the nation's modern history.
In one indication of that progress, Finance Minister Jesus Silva Herzog plans to sign an agreement with the nation's foreign bankers in New York on Friday fixing new dates for repaying $20 billion of debts owed by the government or state-owned companies.
The debt restructuring agreement is believed to be the largest ever. After it is signed, Mexico will resume payments of principal of the public-sector debt. It has been paying only interest since last August.