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Bondholders to meet with IMF, government
Journal Staff Report

LONDON, June 22 - A committee of Ukraine's bondholders said on Monday that a debt restructuring plan proposed by Kiev was based on IMF estimates that were not yet publicly available, adding it hoped to meet with the Fund and Ukraine's government soon, Reuters reported.

Ukraine is negotiating with foreign bondholders to restructure $23 billion of debt as part of a broader International Monetary Fund-led bailout package, but talks have stalled over a disagreement on the necessity of a writedown on the principal of the bonds.

The Ukrainian finance ministry made a $75 million coupon payment on a Russian-held bond on Monday, but has threatened to halt all payments if bondholders fail to make use of a "last chance" debt offer launched last week.

The creditor group, led by Franklin Templeton, said it was evaluating the latest proposal from Ukraine, noting that the assumptions on which it was based would not be publicly available until mid-July.

"In order to properly consider the proposal, the Committee and its advisers urge Ukraine and the IMF to publish those assumptions as soon as possible," creditors said in an emailed statement.

The new offer from Kiev is based on a worsened outlook for the Ukrainian economy and, like the initial proposal, it includes cuts in coupon and principal amounts and maturity extensions, Finance Minister Natalia Yaresko said on Friday.

The IMF has forecast Ukraine's GDP falling 9 percent this year, rather than the previously expected 5.5 percent, but updated economic forecasts will only be published in a statement following an IMF board meeting on Ukraine expected in July.

The creditor group said it expected to meet with Ukraine's government and the IMF as soon as possible, though no date had yet been agreed.

"We view it as vital that all parties sit down and negotiate a deal in good faith, without preconditions, as soon as possible," the statement said.

On Friday Yaresko said the three-way meeting would be held this week, without naming the day. Describing creditors' approach up until then as not constructive, she said Ukraine would stop servicing its debt if a deal is not reached within weeks.

Russia, which has refused to participate in restructuring talks, said on Monday it had received a coupon payment from Ukraine on a $3 billion Eurobond.

The IMF has weighed in on the side of the Finance Ministry, promising to keep lending to Ukraine even if it halts debt payments. It described a proposal by creditors to use central bank reserves to repay debt as "inconsistent" with the targets of the restructuring process. (rt/ez)




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