(Bloomberg) -- Peru’s struggling state-owned oil company is asking the government to convert some of its loans into equity and push back deadlines to avoid running out of cash this year. 

Petroleos del Peru SA has been navigating a worsening liquidity crisis for years, tied to the construction of a brand new refinery that came in over budget and was repeatedly delayed. 

“We have to push back the deadlines of previous debts with the government, that’s what will help us afford operating until the end of the year,” Oliver Stark, Petroperu’s new chairman, told Bloomberg in an interview. “I would have problems if I had to make all payments through December 2024.” 

Petroperu’s cash woes have already led the government to rescue the company in 2022 and earlier this year, but some of that aid needs to be repaid. Petroperu has in the past asked for cash injections instead, but the government has repeatedly ruled them out at a time when the country’s deficit exceeds its legal limit. 

Petroperu has at least $1.5 billion in short-term loans with state entities, disbursed in two installments since 2022. Stark declined to say what proportion of that debt he is seeking to delay versus converting to equity. He said that mix would be defined in coming weeks and then it would be up to the state as sole shareholder to decide on the proposal. 

“We need to achieve an approval soon, very soon,” he said.   

Petroperu also has over $4 billion in outstanding debts with private entities, including bonds. “We are going to continue meeting payments with private lenders, we are giving that our maximum attention,” Stark said. 

The company will also seek to sell assets, including its headquarters in Lima’s business district. Some real estate property has been put up as guarantees against loans with state entities, not with private lenders, and Stark thinks a deal can be reached to sell them. Overall, that could generate around $150 million, he said. 

(Updates to add credit rating chart)

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