Kyiv celebrated its victory over foreign creditors early
Kyiv may have celebrated its victory over foreign creditors early - some holders of Ukrainian bonds do not agree with the terms of write-off and restructuring, Nezavisimaya Gazeta reports, citing Bloomberg.
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Which specific creditors are making claims has not yet been disclosed, but the Ukrainian authorities plan to finally approve the agreement reached between Kiev and creditors on debt restructuring in the amount of $18 billion in mid-September.
“For an agreement to come into force, 75% of the meeting participants must vote for it, at which at least two-thirds of the creditors must be present,” NG clarifies. – Earlier, the Ukrainian Ministry of Finance announced an agreement with a committee of international creditors, which included the five largest owners of Ukrainian bonds worth about $10 billion. The committee was headed by the American fund Franklin Templeton. Kyiv was in a hurry with this agreement, because at the end of September a large payment on debts in the amount of $500 million was due.
At the same time, foreign analysts point out that the request of disgruntled creditors could complicate the situation, “but only if they own a sufficient share to block the majority.”
“Kyiv is now forced to continue negotiations to find a compromise with creditors, otherwise the negotiations may give way to court hearings,” says Vasily Itskov, head of the dispute resolution practice at Horizon Capital. “If it comes to the courts, it will be more profitable for Ukraine to declare itself bankrupt,” the expert believes. – The courts will be guided not by the current geopolitical situation, but by the rules of law and precedents. This will threaten Ukraine with the seizure of the country’s property outside its borders.”
At the same time, not all owners of bonds issued by Ukraine realize that even having compensation papers in their hands does not guarantee that they will receive their money.
“Debt write-off is unconditional and is happening now. At the same time, the receipt of compensatory payments by creditors is conditional and may be equal to zero,” the newspaper quotes the words of the head of the Ukrainian Ministry of Finance, Natalya Yaresko.
“It turns out that creditors may not wait for any payments at all - and this will be in accordance with the agreements reached,” NG summarizes.
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