Ukraine fails to agree with investors on restructuring of $2.6bn debt

Ukraine has failed to reach an agreement with investors on restructuring $2.6bn of debt. Photo: pixabay

Ukraine failed to reach a deal with holders of $2.6 billion in debt during talks in Washington this week. If no agreement is reached, the country faces default.

The Financial Times reports this, citing a statement by the Ministry of Finance of Ukraine.

The Ministry of Finance said that after the failed negotiations, Ukraine is considering all available options to resolve the situation.

By the end of May, Kyiv has to pay almost $600 million in debt obligations. If no agreement on restructuring is reached by then, the issue of default will become relevant.

Ukraine has to repay the debt on warrants — securities issued in 2015 as part of the previous restructuring — if its annual GDP growth exceeds 3%. In 2023, the Ukrainian economy crossed this threshold.

However, the Ministry of Finance emphasises that these warrants no longer correspond to current realities, given the economic consequences of the war.

«These options were created for a world that no longer exists. The modest economic growth in 2023 is not an indicator of prosperity, but only a fragile recovery after a nearly 30 per cent drop caused by Russia's full-scale invasion», the Ministry said.

Earlier it was reported that in 2024, the unified register of debtors was replenished with 712,453 new entries. Most of the debts are for non-payment of fines for traffic violations.