Ukraine

In his 50 years at the state farm here, Volodymyr Polutskiy says his work has dwindled from producing silk for Red Army parachutes to eking out a living chopping wood and growing wheat, The Wall Street Journal reported. Now, Ukraine’s government is trying to sell this farm and hundreds of other state-owned enterprises, hoping that private investment and management will revive the mostly unprofitable businesses and bring funds to its recession-hit budget.

Ukraine's sixteenth largest lender, Financial Initiative Bank, has been declared insolvent, the central bank said on Wednesday, as it pushed ahead with a drive to clean-up the country's financial system. Under pressure from the International Monetary Fund, which has agreed a $17.5 billion bailout for Ukraine in exchange for reforms to the over-populated and corrupt system, Kiev has closed more than 50 banks over the past 18 months. That cut the number of active banks by around 25 percent.

The date of the meeting of the Finance Ministry of Ukraine, the IMF and the Creditors' Committee on restructuring Ukraine's debt obligations hasn't been agreed yet, according to a letter released by the committee which Interfax-Ukraine has acquired, the Interfax-Ukraine news agency reported. "Arrangements are also being made for a meeting between the Committee, Ukraine and the IMF in Washington to take place as soon as possible. No date for this meeting has yet been agreed despite Ukraine's public statements to the contrary.

Ukraine has offered to issue securities linked to future growth in return for private creditors accepting a writedown in debt, in proposals aimed at breaking a deadlock over debt restructuring. Kiev confirmed on Friday that it would continue to service its debt, including making a $75m coupon payment due on Saturday on a $3bn Russian bond. Markets had speculated that Ukraine’s government might impose a moratorium. But people familiar with the talks warned that Kiev was prepared to suspend debt servicing if a restructuring deal could not be reached within weeks.

The State Savings Bank of Ukraine reached an agreement with a creditor group to restructure $1.3 billion of debt even as talks over the nation’s sovereign debt remain deadlocked, Bloomberg News reported. AT Oschadbank, as the lender is known, agreed with creditors holding about half the debt to extend maturities on its 2016 and 2018 dollar-denominated bonds and a 2017 subordinated loan by seven years and to raise coupons on all three securities, the bank said in a statement on its website. Principal will be repaid in installments starting 2019, according to the statement.

Ukraine’s largest creditors say they are deeply concerned by the country’s declaration that it may stop making debt payments unless investors agree to a restructuring plan, as a crucial deadline looms over negotiations, the Financial Times reported. Talks between the two sides have stalled in recent weeks with both accusing the other of intransigence.

Ukraine could stop paying its sovereign creditors within weeks if they do not agree to a debt restructuring, the country’s finance minister said on Wednesday, offering a provocative option over one of the country’s economic problems amid signs of a deadlock in negotiations, the Financial Times reported. The government in Kiev and the International Monetary Fund have set the end of this month as a target to agree on a restructuring of Ukraine’s $70bn in sovereign debt aimed at saving it more than $15bn in debt payments over the next four years.

Metinvest BV’s latest proposal to restructure more than $3 billion of debt was blocked by a group of bond holders Monday, according to two people familiar with the matter, Bloomberg News reported. Ukraine’s largest steelmaker failed to gather enough votes from holders of notes that matured on May 20 to allow the company to delay payment to next year of some of the money owed, said the people, who asked not to be identified because the deal is private.

Ukraine has rejected a debt restructuring deal put forward by international creditors as the two sides struggle to break through a negotiation stalemate, the Financial Times reported. A group of investors representing just under $9bn of Ukrainian bonds, including Franklin Templeton, Ukraine’s largest creditor, this month suggested a plan to reduce the country’s debt burden by $15.8bn over the next four years — a figure that exceeds the $15.3bn targeted by the government.

Ukraine’s decision last week to grant its government the power to stop foreign debt payments marks a distinct shift in tone for the wartorn and recession-battered country. As negotiations between Kiev and its creditors stall and full-blown bankruptcy nears, the rhetoric of government communiques is shifting from conciliation to accusation. Spot the difference in sentiment. In March a presentation to investors noted that “a collaborative process is paramount . . . Ukraine is committed to undertake consultations with its creditors”. By May the government declared it “has the right . . .