Ukraine has not received any formal proposals yet to hold a meeting with the Russian side to discuss the settlement of the issue in relation to the debt of $3 billion on Eurobonds issued under the Yanukovych`s regime, Ukrainian Finance Minister Oleksandr Danyliuk told journalists.
”There was information from the Minister of Finance of the Russian Federation. No specific proposals on where and when [the meeting was to be held] were announced,” Danyliuk said, commenting on the statement by Russian Finance Minister Anton Siluanov that he expected to meet with his Ukrainian counterpart after the autumn session of the IMF and the World Bank, possibly in Germany.
At the same time, Danyliuk said that such a meeting was possible in the presence of the German side and the IMF.
As UNIAN reported earlier, Russia lodged with the London High Court a suit against Ukraine after it defaulted on paying the principal amount and interest on a $3 billion loan. The fact that the bonds were purchased via the Irish Stock Exchange makes the disbursement a private creditor debt. However, the Russian side insisted that this was an interstate debt, as the buyer was the state-owned National Wealth Fund. Ukraine wanted the $3 billion eurobond to be restructured under sovereign and sovereign-guaranteed bonds, but Russia reiterated it did not consider the debt to be commercial.
In the course of negotiations, Russian authorities insisted on better restructuring terms than those offered to other creditors, which is prohibited by the bond swap memorandum between Ukraine and the bond holders.
Ukraine has restructured the debt under the IMF`s Extended Fund Facility program approved by the IMF Executive Directors in March last year. In December 2015, the IMF decided that the claim arising from the $3 billion eurobond issued by Ukraine on December 24, 2013, and held by Russia`s National Wealth Fund was an official claim for the purposes of the fund`s policy on arrears to official bilateral creditors. At the same time, the fund revised its lending policy with respect to debtor countries with payment problems, including Ukraine, enabling the IMF to continue its lending program even in the case of non-repayment of Russia`s loan.
Following Russia`s refusal to participate in the debt operation, Ukraine on December 18 announced a moratorium on any payments of the Russian debt, including repayment of $3 billion, which was due in December 2015. The Justice Ministry was tasked to hire lawyers to defend Ukraine in court. Subsequently, Ukraine`s parliament declared that the moratorium had no fixed term.
According to lawyers and debt market experts polled by UNIAN, the upcoming trial with Russia will be cumbersome and may take several years. Experts also say the trial itself does not pose a threat to Ukraine and a court ruling in Russia`s favor will not be sufficient grounds for instant payment of the debt. In addition, Ukraine is not likely to have problems with access to new loans from the IMF and other official creditors.