Ukraine

Ukrainian lawmakers have proposed thousands of amendments to banking legislation required by the International Monetary Fund, threatening to derail an $8 billion IMF aid package needed to fight the economic fall-out from the coronavirus pandemic, Reuters reported. The law, which prevents former owners of banks declared insolvent from regaining their assets, is seen as against the interests of Ihor Kolomoisky, a tycoon and early backer of President Volodymyr Zelenskiy’s 2019 presidential campaign.

Ukraine’s largest private power producer DTEK is suspending interest payings on Eurobonds and bank loans and will ask creditors to restructure some of its debt due to the economic crisis caused by the coronavirus pandemic, it said on Saturday, Reuters reported. Ukraine has reported 311 cases of coronavirus, including 8 deaths, and the government last week declared an emergency across the whole country for the next 30 days.

In January-November 2019, UAH 7.878 billion was transferred to the accounts of insolvent banks, according to the Deposit Guarantee Fund of Ukraine, Ukrinform reported. “In January-November 2019, UAH 7,877.6 million was transferred to the accounts of banks being under liquidation. Of which the largest sum totaling UAH 6,832.0 million was received from the sale of assets of banks being under liquidation, UAH 928.2 million from repayment of loans, UAH 100.9 million from property rent, and UAH 16.6 million from redemption of securities,” reads the report.

The International Monetary Fund gave tentative approval to a $5.5 billion lending program for Ukraine, after months of prodding Ukraine’s new president to clean up corruption and straighten out the banking sector, the Wall Street Journal reported. A new lending program for Ukraine would be a signal for investors who have worried about Ukraine’s direction under its new president, a former television actor with scant political experience who was elected in April on an anticorruption platform.

Ukraine is finalising changes to legislation on bank insolvency in consultation with the International Monetary Fund as part of efforts by Kiev to secure a new loan programme, a senior state official told Reuters. Ukraine wants an IMF deal worth around $5 billion-6 billion over three years to support its economy and signal to investors that the new government of President Volodymyr Zelenskiy is committed to reform, Reuters reported.

A London court order for Ukraine’s largest lender PrivatBank to repay two of its defaulted bonds in full plus interest is a boost for their holders, but looks set to add to Kiev’s complex tussle with the bank’s former owner, oligarch Igor Kolomoisky, Reuters reported. The ruling by the London Court of International Arbitration (LCIA) was originally made in June but the exact details have only just emerged after the bonds’ trustee got approval to communicate them to investors.

Restructuring of JSC Ukrzaliznytsia can last from one to three-four years depending on the scenario the government will choose, Ukrzaliznytsia head Yevhen Kravtsov told the journalists in the European Business Association (EBA) on Wednesday, Interfax reported. "There was an instruction to prepare a restructuring plan for Ukrzaliznytsia. For our part, we completely got in this process. We have already suggested in previous discussions with the minister a possible scenario for restructuring.

Foreign investors have ended their near-boycott of Ukrainian local currency government debt, returning en masse in recent months amid an improving political and economic backdrop, the Financial Times reported. Just 1.6 per cent of Ukraine’s hryvnia-denominated sovereign bonds were held by foreign investors in December, in the wake of a series of calamities that had seen the currency ship 70 per cent of its value against the dollar since the start of 2014.

The operator of the gas transportation system, Ukrtransgaz, has signed an agreement on debt restructuring in the amount of UAH 1.47 billion with the ERU Trading company. Ukrtransgaz said this in a statement, the Ukrainian News Agency reported. “On June 27, Ukrtransgaz concluded an agreement on debt restructuring for a total amount of UAH 1.47 billion, writing off penalties imposed and settling other mutual claims with ERU Trading,” the statement reads.

An ally of Ukrainian President Volodymyr Zelenskiy rejected an influential businessman’s call to default on the nation’s external debt, saying the proposal is the view of a “detached oligarch,” Bloomberg News reported. "Default is not in the interest of the state. Any responsible government must avoid it," former Finance Minister Oleksandr Danylyuk, who advised Zelenskiy’s campaign and is slated to join the National Defense and Security Council in the new administration, told Bloomberg.