AP Photo Argentine President Cristina Fernandez de Kirchner

An Argentine billionaire, Eduardo Eurnekian, is arranging a deal to get his country out of default before it’s too late, Bloomberg reports.

Deutsche Bank, JP Morgan, Citigroup and HSBC are all said to be in talks with Eurnekian and a group of hedge fund holdout creditors.

Argentina owes the holdouts over $US1.3 billion worth of sovereign debt dating back to the country’s 2001 default, according to a U.S. Court order.

The Republic, however, says that it cannot pay the holdouts — led by hedge fund manager Paul Singer, founder of Elliott Management — more than 30 cents on the dollar, which is what 0ver 90% of other holders of the same bonds have accepted.

Singer wants 100 cents on the dollar, but Bloomberg reports that his fund might be willing to accept 80 to 85 cents on the dollar in a deal with banks.

In an interview with Argentina’s Radio Mitre, Eurnekian said: “The banks are working to try to bring people closer. It’s very complex. I don’t know how it gets resolved. It’s an issue for lawyers and financiers. But there’s no doubt that we want to fix this.”

Eurnekian runs Corporacion America holding group, which manages businesses ranging from airports to energy.

Argentina has said that it cannot pay the holdouts before 2015 because of a clause in its bond contract — the Rights Upon Future Offers, or RUFO Clause. The clause states that if Argentina voluntarily gives some investors a better offer for their investment, others are entitled to the same deal. The RUFO clause expires in 2015.

Ideally, banks would purchase the holdout investors’ debt — and right to be paid 100 cents on the dollar — for 80 to 85 cents. Then 2015 would come and Argentina would be forced to pay the banks 100 cents on the dollar, making banks a nice tidy profit.

But it’s hard to trust Argentina here. Investors, attorneys and analysts alike have said that the RUFO clause probably wouldn’t be triggered anyway, since it is only triggered in the event of a voluntary deal, and the payment to holdouts under contention would be Court ordered.

So if RUFO is just an excuse to force the holdouts into taking a haircut, who is to say the Argentina would pay 100 cents on the dollar to banks later?

That said: If the banks do pull this off and manage to win favour with Argentina, they could be the ones to win some amazing business. Since 2001 Argentina has been a pariah in international markets. Lately though, it’s been paying some of its debts in order to rejoin the world. It is a rich country, and if it does manage to regain the market’s confidence, banks could win big business bringing Argentina back into the fold.

In the meantime the rhetoric of Argentine political leaders remains the same. Economy Minister Axel Kicillof has moaned that President Obama should interfere with a U.S. Court’s ruling that it pay the holdouts, and is suing the U.S. in the International Court in the Hague. An interesting request from a country that has ignored international Court rulings in the past.

Of course, the U.S. has to agree to go to Court in the Hague. So this, more than anything, seems like a classic piece of Argentina political theatre.

As was this — a two page ad that the Argentine government ran in the New York Times on Thursday, declaring that it was not in default. Judge Thomas Griesa, the man who ruled that Argentina must pay the holdouts, called The Republic’s lawyers to Court Friday to discuss it.

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