(MENAFN- The Peninsula) Ukraine's finance minister said on Friday that Kiev and its private creditors were about to launch direct debt restructuring negotiations that could save the war-torn country from a devastating default.
Natalie Jaresko's comments came as the ex-Soviet state's pro-Western leadership races to meet a late July deadline by which it must find a way to save $15 billion (13.7 billion euros) over four years.
A watertight debt restructuring plan would allow the International Monetary Fund to hand over the next slice of a $17.5-billion loan at the core of a $40-billion global aid package.
IMF executives are yet to name a specific date on which they will discuss Ukraine during their late July meeting.
"Our advisers are in contact on a daily basis," Ukrainian news agencies quoted Jaresko as saying.
"We should reach the stage of direct negotiations very soon. That way, we will be able to reach an agreement in an absolutely constructive and conscientious manner."
Ukrainian President Petro Poroshenko on Thursday signed a bill passed by parliament last week giving Kiev "the right, if necessary, to stop payments to foreign debt holders."
The measure is largely symbolic and meant to underscore lawmakers' support for a debt payment moratorium that could theoretically turn Kiev into a financial outcast that looses access to the international lending market.
Such a freeze would almost certainly prompt Russia - due a $3-billion loan repayment at the end of the year - to ask the International Court of Justice in The Hague to declare Ukraine in default.
Moscow has refused to discuss any loan restructuring proposals and argued that it technically already has the right to ask for the money back.
Five large US private creditors who hold $8.9 billion of the debt have thus far also stuck to their terms.
They have particularly rejected the US Treasury Department and Jaresko's debt "haircut" proposal that slashes the bond's original value and forces them to assume a loss.
Bloomberg reported on Friday that the creditors - led by Franklin Templeton and including such bond market giants as PIMCO and Blackrock - on May 9 submitted a counter-proposal they said would save Ukraine $15.8-billion over four years.
It reportedly preserves the bonds' original value but extends their maturities by 10 years. Bloomberg said the proposal would also lower the interest payment and allow the original loan amount to be payed back in small instalments instead of a lump sum.
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