The World - News from Oct. 7, 1987

Peru’s navy has agreed to build 80 ships and tugboats for the Soviet Union in a deal that could help reduce Peru’s debts to Moscow, a Peruvian spokesman said. Miguel Vargas, chief of services for the navy’s Sima shipbuilding company, said the vessels, worth an estimated $375 million, are to be built in the next six years. Many of the ships would augment the Soviet Union’s fishing fleet. Vargas said the final agreement could include an arrangement for Peru to pay some of the $1 billion it owes to the Kremlin, Peru’s major weapons supplier. The plan requires formal approval of the Peruvian government. The country’s total foreign debt is about $14.5 billion.