BEIRUT (Reuters) - Lebanon has given approval for U.S. asset management company Lazard (N:LAZ) to be its financial adviser on debt restructuring, a government source said on Tuesday, with the heavily indebted state facing a major financial crisis.
At a cabinet meeting on Tuesday, approval was also given for law firm Cleary Gottlieb Steen & Hamilton LLP to act as the government's legal adviser, the source said.
Lazard's recent restructuring work has included large retailers such as Neiman Marcus, which reached agreement last March to extend maturities on more than $2.5 billion of its debt, and Forever 21, which filed chapter 11 bankruptcy last September.
Lebanon is grappling with a choking financial crisis. A foreign currency liquidity crunch has forced banks to impose tight restrictions on access to hard currency and transfers abroad and the Lebanese pound has slumped.
One of Lebanon's most influential leaders, parliament speaker Nabih Berri, said last week that debt restructuring was the best solution for looming Eurobond maturities, which include a $1.2 billion Eurobond due on March 9.
S&P last week lowered Lebanon's sovereign rating on the expected debt restructuring. Moody's also downgraded Lebanon, saying the rating reflected expectations that private creditors would likely incur substantial losses in any debt restructuring.
Fitch also said Lebanon's financing position points to debt restructuring.