He will also repay another $95 million to creditor banks at 50 to 65 percent of the face value during the next two years.

About 300 creditor banks worldwide are expected to sign the agreement.

And certainly the creditor banks will come running to their respective governments.

Brazil, with a total foreign debt of $121 billion, has about 700 creditor banks.

"Leaving it closed has been far from ideal," said an executive at an Indian creditor bank.

However, sources close to the creditor banks holding the firm's $30bn debt said this deal was now dead.

But talks with its creditor banks broke down without an agreement on Friday.

South Korea's main stock index was down 6 percent, but the creditor bank said the group's financial condition remained sound.

The package is subject to approval by Argentina's 350 creditor banks.

The suspension is expected to cost Ecuador's creditor banks about $500 million this year.