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Progress between Ukraine and its creditors on the country’s debt restructuring may be losing momentum after the latest proposal from the Ukrainian government is said to be unacceptable to the nation’s bondholders, Bloomberg reported with reference to the sources that are familiar with the matter.
The updated proposal was submitted by Ukraine’s Ministry of Finance in late July, and neither the proposal’s details, nor creditors’ claims were disclosed.
Still many differences are said to be between Ukraine’s and its creditors’ positions regarding restructuring, while the deadline for the September bond is approaching, Bloomberg reports.
It is also not clear whether the request of the Ukrainian government for high-level face-to-face talks in London on Thursday will be answered.
Holding a high-level direct meeting would be premature with just 48 hours notice given the geographically disperse nature of the committee’s membership, the person said today, the source told Bloomberg.
As UNIAN reported earlier, on August 4, Ukrainian Finance Ministry sent a revised proposal on the sovereign and sovereign guaranteed debt to the ad hoc creditors` committee, calling this week decisive for the negotiations.
Ukraine started debt restructuring talks in March, as part of Ukraine`s cooperation within the framework of its loan program with the IMF. The measures aim at saving $5.2 billion of debt payments in 2015 and up to $15.3 billion in the next four years.
After months of relative stalemate in the negotiations, only state-owned Oschadbank and Ukreximbank indicated some progress in debt restructuring, having agreed with their creditors to extend maturities for seven years on debt amounting to $1.5 billion and $1.3 billion respectively, in exchange for the coupon increase without writing off the principal debt.
In late June, Ukrainian Finance Minister Natalie Jaresko stated that if there were no progress in talks with the creditors, Ukraine would "theoretically" be in a position to declare a moratorium on public debt payments in late July, with such right being provided by a law, which had come in force on June 17.
Later, Ukrainian officials and the ad hoc creditors' committee issued a joint statement reporting a significant progress made in the negotiations and reaching confidentiality arrangements.
On July 24, the Ukrainian Finance Ministry carried out a $120 million interest payment that came due on that day.
Last week, Bloomberg reported with reference to its own sources that the country's creditors had accepted a 5-percent haircut on their principal holdings, and Ukraine suggested to hold direct negotiations in the first week of August.