Ukraine ready to negotiate ”Yanukovych loan” with Russia but prepares for London trial – Finance Minister

Acting in compliance with the current program, approved by the International Monetary Fund (IMF) regarding carrying out negotiations with Russia in ”good faith”, Ukraine is ready to enter into further talks to solve a dispute over a $3 billion loan received in December 2013 as part of an agreement between Russian President Vladimir Putin and then President of Ukraine Viktor Yanukovych, according to Finance Minister Oleksandr Danylyuk.

The minister underscored that Ukraine had clearly set out its objections to Russia`s claim that were submitted on May 27, 2016 in the framework of the proceedings being held at the English court, and stressed that the country was strictly adhering to this position.”Despite the fact that Ukraine generally remains open to the possibility of an amicable settlement of the dispute should acceptable grounds be found for that, Ukraine is confident in its legal position and focuses on preparations for the hearing, which is scheduled for January 2017,” Danylyuk said, commenting on Russian Finance Minister Anton Siluanov`s statement that the consideration of Russia`s claim regarding Viktor Yanukovych`s debt would be launched at the High Court in London in early 2017, and that Russia was ready for a pre-trial settlement.

”Any such negotiations, which could take place at an appropriate time, for example, in the course of the upcoming meetings with the IMF during the week of October 3, 2016, do not interfere with Ukraine`s position regarding the court proceedings mentioned,” Danylyuk said.

As UNIAN reported earlier, the debt was negotiated between Russian President Putin and former Ukrainian President Yanukovych in the form of a Eurobond issue worth $3 billion in December 2013, maturing in December 2015.

Russia lodged a suit with the London High Court against Ukraine after Kyiv 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 sought the $3 billion Eurobond to be restructured under sovereign and sovereign-guaranteed bonds, but Russia reiterated it did not consider the debt as commercial.

In the course of negotiations, Russian authorities also 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.

Read alsoUkraine court bans payments on $3 bln loan from Russia Ukraine restructured the debt under the IMF`s Extended Fund Facility program approved by the IMF Executive Board 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.

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