Ukraine`s Rada allows companies to restructure debts owed to banks

Ukraine`s Verkhovna Rada has adopted a draft law on financial restructuring in second reading to regulate the procedure for restructuring operating businesses` debts owed to banks, an UNIAN correspondent reported.
A total of 229 deputies supported bill No. 3555 with the required minimum of 226 votes.
It is also noted that the adoption of the bill will allow Ukraine to fulfill its obligations as envisaged by the memorandum [of cooperation] with the International Monetary Fund (IMF).
At this, Deputy Chairman of the Parliamentary Committee on Financial Policy and Banking, Ruslan Demchak, said the draft law concerns only the restructuring of debts of legal entities.
”The draft law aims to prevent the bankruptcy of operating companies, avoid the repetition of mistakes of the 90s, and allow them [companies] to survive,” Demchak said adding that improvements in the draft bill had been made before its second reading.
”The bill has been thoroughly elaborated by MPs, representatives of the Finance Ministry, the NBU, the World Bank, the IMF, the European Bank for Reconstruction and Development,” Demchak said.
According to him, the latest version of the bill includes the provisions regarding reciprocal voluntary restructuring procedures, while raising the threshold for initiating the restructuring procedure by a debtor and also enabling other lenders to join the restructuring process after its initiation. In addition, the powers of arbitrators have been strengthened.
As UNIAN reported earlier, following the results of a meeting on June 1 the Verkhovna Rada Committee on Financial Policy and Banking suggested that the parliament should adopt the draft law on financial restructuring as a basis.
In November 2015, the Ukrainian government approved a package of bills to support foreign currency loans of citizens and businesses, including the draft law on financial restructuring.
According to experts` estimates, corporate debts that would fall within the scope of the proposed mechanism may total UAH 200 billion.

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