Ukraine to defend itself against Russia's $3B Eurobond suit

Kiev prepares to defend itself in London court against lawsuit filed by Moscow over $3 billion Eurobond

Photo by: Reuters (Archive)
Photo by: Reuters (Archive)

Ukraine prepares for court battle with Russia over $3 billion Eurobond.

Ukraine is ready to defend itself against a lawsuit brought by Russia in relation to a $3 billion Eurobond that Moscow insists Kiev must repay, the Ukrainian Finance Ministry said in a statement on Thursday.

Ukraine included the two-year bond in the commercial debt it planned to restructure to shore up its war-torn economy, but Russia, which lent the money, has refused to participate and on Wednesday filed a lawsuit in London.

"Ukraine acknowledges the formal commencement ... of proceedings before the English High Court of Justice. Ukraine intends and is fully prepared vigorously to defend its interests," the ministry said in a statement.

The Eurobond was taken out by the government of Moscow-backed ex-president Viktor Yanukovich just two months before he fled to Russia in February 2014 in the face of street protests that brought a pro-European government to power.

Kiev has offered Russia the same restructuring terms, including a writedown, that it offered its other creditors.

Russia, whose political relations with Kiev are at rock bottom over the Kremlin's role in Ukraine's separatist insurgency, has refused to accept the restructuring terms, insisting the bond is an official country-to-country loan, not commercial debt.

In a surprise move late last year, President Vladimir Putin offered Ukraine new terms on the bond, saying Moscow would accept an annual debt repayment of $1 billion over three years if the West provided guarantees.

Ukraine did not agree to those terms, but said it was willing to negotiate a deal.

TRTWorld, Reuters