KIEV, Aug. 20 - Ukraine on Thursday was expecting the imminent announcement of a crucial debt restructuring agreement that could save the country from default, AFP reported.

Five months of excruciating negotiations between Kiev's cash-strapped leadership and some of the world's biggest commercial creditors have reached the finishing line with the outcome still in serious doubt.

At issue are both a debt burden of around $19 billion and the very economic future of Ukraine -- a vast former Soviet republic straddling the diplomatic no-man's-land between the European Union and an increasingly assertive Russia.

The possibility of Ukraine either outright defaulting on its obligations or imposing a payment freeze could shut Kiev out of global borrowing markets and severely hamper its IMF-led austerity and economic restructuring drive.

The International Monetary Fund has patched together a $40 billion (35.8 billion euro) rescue package that could wean Ukraine off its reliance on Russia and turn it permanently toward the West.

But that deal includes finding a compromise with bondholders that could save Ukraine $15.3 billion over the next four years.

Franklin Templeton and three other financial titans that own $8.9 billion of that sum believe Ukraine is in strong enough shape to repay the debt in full and more or less on time.

The four have rejected Kiev's request to accept a 40 percent cut to their Eurobonds' face-value and instead offered a conditional write-down or "haircut" of between five and 10 percent.

What Kiev described as the "final" round of discussions between US-born Ukrainian Finance Minister Natalie Jaresko and Templeton managers at their base near San Francisco concluded without a deal.

But several sources with knowledge of the negotiations said a major debt announcement of some sort could come as early as Friday.

But one source close to the issue told AFP on Thursday that "legal and administrative considerations" were pushing back the deal's disclosure into next week.

Time is of the essence because the IMF's support package requires Kiev to restructure a $500 million Eurobond that matures on September 23.

Yet talks with all the various investors -- stipulated to take no more than three weeks -- cannot effectively begin until terms with the Templeton-led group are reached.

Jaresko has warned repeatedly that Ukraine could impose a repayment moratorium as early as this week.

The decision would save Kiev $60 million in interest payments that come due on Sunday. The big downside is that it would also find the government facing possible lawsuits and exorbitant future borrowing costs. (afp/ez)