LIMA, Feb 27 (Reuters) - Peru's government granted state-run oil producer Petroperu an $800 million loan guarantee to keep its operations afloat, according to a decree published on Tuesday in the country's official gazette.
The government on Monday reshuffled the board at the firm, which has cited spending needs of more than $2.5 billion.
The new financing will enable Petroperu to pay suppliers, the government said, noting it would also expand a short-term debt operation for the company for up to $500 million.
The economy ministry said the financing constitutes "extraordinary measures" and that the loan, granted by the state-owned Banco de la Nacion, will be used as the company's working capital.
Petroperu must carry out a reorganization in less than 15 working days, the decree said. Once the new board is in place, it has 20 days to approve its 2024 restructuring plan.
Petroperu must also implement a voluntary retirement program within 60 days.
Peru's economy minister warned earlier this week of Petroperu's "huge liquidity problem," saying the government hoped to make it solvent again through financial backing and austerity measures.
The government relief is the latest offered to Petroperu, which lost its investment grade in 2022 due to a financial crisis after a bigger-than-expected $6.5 billion investment in its Talara refinery.
The company's crude production operations were privatized in the 1990s and it has since dedicated itself to refining and selling oil. (Reporting by Marco Aquino; Editing by Anthony Esposito, Kylie Madry and Richard Chang)
