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Ukraine ready to sue Russia over refusal to restructure debt — Ukrainian PM

October 15, 2015, 11:14 UTC+3
According to the Kremlin, Moscow’s position on Ukraine’s debt restructuring remains unchanged: Kiev must pay off the debt in full and on time
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Ukrainian Prime Minister Arseniy Yatsenyuk

Ukrainian Prime Minister Arseniy Yatsenyuk

© TASS/Maxim Nikitin

KIEV, October 15. /TASS/. Ukraine is ready to sue the Russian Federation over the issue of debt restructuring of Kiev in the amount of $3 bln, Ukrainian Prime Minister Arseniy Yatsenyuk said Thursday.

"We are ready for the judicial proceedings," he said.

According to Yatsenyuk, Kiev offers Moscow to re-examine on October 29 the conditions of partial relief of Ukrainian debt that were earlier submitted to the special committee of creditors.

"We propose Russia to once again decide on October 29 - are they ready or not to accept [Ukrainian conditions - TASS]," Yatsenyuk said.

According to him, if Russia refuses, Kiev intends to solve this issue in court. He urged Russia to "join normal countries that made the decision to restructure."

"The issue with $3 bln debt Russia should restructure and partly write down remains outstanding. We suggest that Russia accept restructuring conditions of the creditors committee on October 29," Yatsenyuk said.

"No other conditions will be offered to Russia," he added.

Ukraine's foreign guaranteed debt currently stands at $70.5 bln, Yatsenyuk added.

"Total amount of the foreign debt was $73.1 bln as of December 31, 2013. The state and guaranteed debt was $70.5 bln as of September 1, 2015," he added.

Ukraine’s Ministry of Finance has been dealing with restructuring for 1.5 years, Yatsenyuk said.

Russia’s position on Ukraine’s debt remains unchanged

 

According to the Kremlin, Moscow’s position on Ukraine’s debt restructuring remains unchanged. Kiev must pay off the debt in full and on time, Kremlin spokesman Dmitry Peskov told TASS on Thursday.

"As for Ukraine’s state debt, nothing has changed in the position of the Russian side," Peskov said.

The Russian government made a statement last month that Moscow was expecting Kiev to repay the debt in full and on schedule.

The Russian government also said it would be better for the debtor to pay off the debt right now because a default on its obligations would cost it much more and Kiev would have to pay judicial expenses and penalties for overdue liabilities.

The Ukrainian financial authorities have said on many occasions they consider Russia’s $3 billion loan as a commercial debt and insist on its restructuring. Meanwhile, Russia insists the loan is a state debt and demands its full redemption.

Debt restructuring results are crucial for Ukraine to get new loan tranches from the IMF.

Russia made a decision in late 2013 to invest up to $15 billion in Ukraine’s sovereign Eurobonds. Soon afterwards, Russia bought Ukraine’s first Eurobond tranche worth $3 billion with a two-year maturity and a coupon rate of 5% per annum and coupon payments every six months.

Russia subsequently decided against investing the other $12 billion in Ukraine’s bonds.

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