Ukraine

Ukraine’s finance minister said Wednesday the government hopes to start debt negotiations with creditors next month after it completes a deal on an expanded emergency-loan package with the International Monetary Fund, The Wall Street Journal reported. “Once we’ve come to an agreement with the IMF on the program, we will invite our sovereign creditors to consult with us on how we can work together to improve the medium term debt sustainability of the country,” Ukraine Finance Minister Natalia Jaresko said in an interview.

Ukraine isn’t planning to restructure its debt and is working with the International Monetary Fund on a “sustainable program” to fight a recession and sinking foreign reserves, the nation’s acting deputy central bank head said, Bloomberg Businessweek reported. “We are a good a borrower and we want to follow the credit history of Ukraine and therefore this discussion on restructuring is not on the table now,” Vladyslav Rashkovan said Tuesday in an interview in Vienna. Debt restructuring is “absolutely,” he said.

Ukrainian bonds have sunk to a record low on concerns that the strife-torn country will default this year, as a tool developed by the Financial Times in collaboration with the International Monetary Fund shows the country’s debts have spiralled far higher than expected. Kiev was bailed out by the IMF last spring after the ousting of Viktor Yanukovich from the presidency, but Russia’s annexation of its Crimean region and support for separatist rebels in the eastern industrial heartlands have wrecked its economy and state finances.

Creditors of Mriya Agro Holding Plc said they presented the Ukrainian agricultural group with their own plan to restructure about $1 billion debt, Bloomberg News reported. Bondholders and lenders want the company to hire a chief restructuring officer and have submitted a “detailed proposal” to help rescue the company and avoid insolvency, according to an e-mailed statement from Rothschild, their financial adviser. Tension between management and creditors has been growing since Mriya said in August it missed payments on some of its obligations.

European leaders are balking at providing additional financial aid for Ukraine despite an urgent need to fill a $15bn funding gap as criticism of Kiev’s reform efforts mounts, the Financial Times reported. The International Monetary Fund has identified the hole in Ukraine’s public finances, prompting Kiev to seek assistance from European and other governments to avoid a possible default.

Lawmakers gave initial approval Thursday to a government program containing the outline for an economic overhaul aimed at stabilizing the country’s finances, as Western backers prepare a new aid package, The Wall Street Journal reported. Prime Minister Arseniy Yatsenyuk had raised the risk of possible default in calling on parliament to support the measures, although his finance minister played down the likelihood of that scenario.

International bondholders advised by Rothschild are recommending a change in control at Ukrainian agricultural company Mriya Agro Holding Plc as the grower of crops from wheat to potatoes seeks to restructure about $1 billion of debt, Bloomberg News reported. Tensions have increased since Mriya said in August it missed payments on some of its obligations. Rothschild, which is representing a group of creditors including Ashmore Investment Management Ltd, T. Rowe Price Associates Inc.

Ukraine will need additional bailout financing from outside the International Monetary Fund to keep the war-torn economy afloat, the head of the IMF said Thursday. The cost of the conflict with Russia-backed separatists has changed the country’s cash needs since the IMF originally designed a $30 billion international bailout program in April, of which the fund pledged to cover $17 billion.

Ukraine's KVV Group has offered to buy Latvia's insolvent steelmaker Liepajas Metalurgs for 107 million euros ($138 million), the insolvency administrator said on Tuesday, Reuters reported. Liepajas Metalurgs, the only producer of rolled steel in the Baltic countries, filed for bankruptcy last year, blaming weak demand in Europe. The KVV Group has provided a clear plan for re-launching the plant's operations, the insolvency administrator Haralds Velmers said in a statement. KVV Group is going to pay the sum over 10 years.

Ukraine is facing a $3.5 billion funding gap and could need additional financing worth $19 billion next year if fighting continues through 2015, the International Monetary Fund said Tuesday in its latest review of the emergency bailout, The Wall Street Journal reported. The continuing conflict between Kiev's forces and pro-Russian separatists in the eastern region of Ukraine, where the country's manufacturing is centered, is forcing the economy deeper into recession and raising rescue costs.