(MENAFN- AFP) Ukraine's finance minister said on Friday that Kiev would make the next interest payment on a disputed Russian loan it had threatened to stop servicing.
"Two days ago, we paid $39 million (34 million euros) for (Western-held) Eurobonds, and we will also pay $75 million to cover the so-called Russian bonds," Natalie Jaresko told reporters.
Russia had warned it would ask the International Court of Justice in The Hague to declare Ukraine in default if it failed to make a scheduled $75-million interest payment on Saturday.
Jaresko said the money would be delivered on Monday because Saturday was a bank holiday.
The coupon covers a $3 billion loan Moscow extended to former Ukrainian president Viktor Yanukovych in the wake of his shock December 2013 decision to ditch a landmark EU alliance and preserve closer ties with Russia.
The pro-Western leadership that emerged after three months of protests over that decision has denounced the loan as little more than a Kremlin bribe and recently tried to delay its repayment.
But Moscow -- already accused by Kiev and the West of orchestrating and supporting the pro-Russian uprising in Ukraine's separatist east -- has refused to negotiate and still expects the bond's principal returned when it matures in December.
Cash-strapped Ukraine is urgently trying to find a way to save $15.3 billion over the coming four years.
The potential savings form a part of a $40-billion global rescue package that also includes IMF lending and is meant to keep the strategic former Soviet country from going bankrupt and into default.
Jaresko said tough rounds of separate negotiations with Ukraine's private Western lenders will continue next week.
But she stressed that Ukraine still expected those creditors -- comprised of four US financial titans who include the likes of Franklin Templeton -- to take a so-called "haircut" that will see the principal's value slashed and the coupons' payments reduced and delayed.
Earlier reports said the restructuring package being proposed by Kiev would see the US funds get back about 60 cents on the dollar.
The group of four holds about two-thirds of the debt Ukraine is trying to delay repaying and has firmly rejected the proposed deal.
Yet Jaresko argued that Ukraine -- its already dire 2015 economic outlook slashed earlier this month by the Fund to a contraction of 9.0 percent -- faced no alternative but to insist on the tough debt restructuring terms.
"Considering that recently Ukraine's economic growth forecast turned worse, today Ukraine is sending the (private) creditors' committee a revised debt restructuring offer," Jaresko said.
"The updated proposal includes a considerable reduction of the principal, an extension of the debt servicing terms, and changes to the interest payment," the US-born Ukrainian finance minister said.
The so-called Ad-hoc Committee of Bondholders to Ukraine said in a letter published in the Financial Times on Wednesday that "a haircut sends the wrong signal to global capital markets when Ukraine can least afford to be shunned."
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