- Talks brokered by Germany planned at IMF Washington meetings
- Court procedings over defaulted bond due to begin in January
Russia’s finance minister is planning to meet with his Ukrainian counterpart for the first time since a $3 billion bond default, saying he’s still open to an out-of-court settlement.
Talks brokered by Germany are being planned during International Monetary Fund meetings in Washington D.C. in early October, Russian Finance Minister Anton Siluanov said at a press briefing in Moscow on Monday. The government in Moscow filed a lawsuit in London in February seeking to recover the debt, which Ukraine failed to repay when it came due in December. Hearings are due to begin early next year.
The two former-Soviet countries have been at loggerheads over whether Russia should be granted better restructuring terms than Ukraine’s private creditors accepted in a $15 billion debt overhaul last year. The government in Moscow is willing to consider a proposal if terms are “substantially different” from those given to bondholders including Franklin Templeton, Siluanov said.
“If Ukraine continues to make the same demands as in previous meetings, the negotiations will be completely unconstructive,” Siluanov said. “That is our firm position.”
The meeting will be the first between Siluanov and Ukrainian Finance Minister Oleksandr Danylyuk, who replaced Natalie Jaresko in April. Jaresko held discussions with Siluanov over the debt at the IMF meetings last October, but the sides were unable to overcome differences over terms. Ukraine has repeatedly said Russia must accept the restructuring terms, including a 20 percent in principal, like everyone else.
Russia bought the debt in December 2013 to bail out former president and ally, Viktor Yanukovych, just months before he was toppled and Vladimir Putin annexed Crimea. The takeover of the Black Sea peninsula and war with pro-Russian rebels in Ukraine’s east pushed the country to the brink of insolvency, forcing it to restructure all of its sovereign debt and seek an international bailout.