Nauru on the verge of total default to major US financier

0 Comments | AFP, April, 2004

AUCKLAND (AFP) — Nauru, the world's smallest republic, is on the verge of a default that will result in a major United States financier seizing the once rich Pacific nation's last assets, diplomatic sources said.

The country of 12,500 people owes the US General Electric Capital Corporation, which has a mortgage over Nauru's Australian property investments, around 230 million Australian (169 million US) dollars.

But with a political crisis hampering efforts to revive economic fortunes, a Nauru opposition political newsletter published this week warned the country faces foreclosure by May 5 after failing to meet several payment deadlines.

Receivers have already moved in on a Nauru-owned hotel in Sydney and ailing president Rene Harris was to fly to Australia...