Argentina replaced its navy chief on Monday as it investigates the seizure of a frigate in Ghana by bondholders who say they will not release the vessel until the South American country repays money owed them after its 2002 debt default.
The Libertad, a training frigate with some 300 crew on board, was detained in the Ghanaian port of Tema on October 2 under a court order obtained by NML Capital Ltd, an affiliate of investment firm Elliott Management.
The firm says Argentina owes it over $300 million on defaulted debt and it will only release the ship if the country pays it at least $20 million.
The Libertad carries a crew of around 100 plus 200 naval cadets from South Africa, Namibia, Morocco, Chile, Uruguay, Paraguay, Venezuela, Brazil and Peru.
The Defense Ministry replaced navy chief Carlos Alberto Paz soon after removing two other senior officials as part of a probe into who was responsible for the ill-fated decision to stop in Ghana, a Ministry statement said.
President Cristina Fernandez’s government has condemned the ship’s detention, saying it could not be targeted by creditors due to its military nature. A Ghanaian court ruled that Argentina forfeited such immunities when it issued the bonds.
Fernandez dispatched several senior officials to Accra to resolve the stand-off as recriminations mount over why Ghana was included on the vessel’s tour of the region.
Argentina declared a massive sovereign default a decade ago at the height of an economic crisis and now faces a raft of lawsuits in U.S. courts by so-called holdout bondholders seeking state asset freezes to recover the value of defaulted bonds.
The bondholders, which the Argentine government calls vulture funds, normally target foreign bank accounts held by state-run companies or government agencies.