Creditors approved a decision to reduce Ukraine's debt by US$3 billion
OREANDA-NEWS. October 16, 2015. "All the bondholders of Ukraine, by the majority which makes up over 75% votes in the Ad Hoc Committee of Creditors, decided to reduce an overall debt of Ukraine by a total amount worth US\\$3 billion and to restructure the corresponding debt for a total sum of US\\$8.5 billion", explained Prime Minister of Ukraine Arseniy Yatsenyuk at a briefing at the Government House.
Thus, in the next four years Ukraine will not repay the principal due of the loan.
Arseniy Yatsenyuk reminded that at the beginning of 2014 the total external debt of Ukraine had amounted US\\$73.1 billion: "This was the country we had received almost two years ago."
As of September 1 of the current year, sovereign and sovereign guaranteed debt made up US\\$70.5 billion. "This is an answer to the question whether external debts are growing. Despite the fact that we receive financial aid from our Western partners, that we receive additional financial resource, we manage to repay our debts and reduce the total amount of the sovereign and sovereign guaranteed debt," stressed the Head of Government.
Arseniy Yatsenyuk reminded that the government team had been engaged in the negotiations on restructuring and cancellation of the external debt in the past six months: "We congratulate the Ukrainian Parliament on the fact that they could have supported with the constitutional majority the law on restructuring of external debts of Ukraine, including the terms for restructuring and reducing of this debt".
According to the Prime Minister, the main objective was "how to deal with 15 billion dollars of debt that we had to pay off over the next four years, but we had just lacked the money": "We had set the first goal which is to cut the total debt to our foreign creditors up to US\\$ 4 billion. First part of this task has already been done".
Apart from that, he explained that the borrowings of two state-owned banks had been reconstituted – "in general, the Oschadbank and the Ukreximbank Eurobonds have been restructured to the tune of US\\$2.8 billion”: “It implies an additional financial stability in the Ukrainian banking sector. This means that these banks have extra financial resource and will have a much stronger financial sustainability, thus financing the Ukrainian economy and freely serving the Ukrainian depositors".
On the agenda is further restructuring. Arseniy Yatsenyuk, in particular, welcomed the efforts of the Kyiv city in the issues of restructuring and reducing their debt obligations. "Lenders should realize their responsibility to the city of Kyiv", he stressed.
The Prime Minister also reminded about the restructuring of debts of the Ukrzaliznytsia for US\\$500 million, adding that the plans also envisage the Ukravtodor, the Ukrmedpostach and the Pivdenne Design Bureau. "It's worth US\\$0.7 billion”, summed up Arseniy Yatsenyuk.