January 4, 2016 / 10:47 AM / 2 years ago

Ukraine 'confident' of success in Russian debt lawsuit

KIEV (Reuters) - The Ukrainian Finance Ministry said on Monday it was confident of its chances in court following a decision by Russia to file a lawsuit against Ukraine in connection with a $3 billion Eurobond.

Kiev and the Kremlin have been at loggerheads for months over the bond, which Ukraine included in the external debt it earmarked for restructuring. Russia has repeatedly declined to participate in the process, while Ukraine insisted it could not repay the bond in full.

On Friday, Russia confirmed it would take Ukraine to court after Kiev missed the final deadline for the bond’s repayment.

“The Ministry of Finance of Ukraine takes note of the apparent decision by the Russian Federation to initiate legal action against Ukraine,” the ministry said in a statement.

“Ukraine is ready to defend itself against any claim that may be brought against it, and is confident in all the circumstances of doing so successfully.”

Nevertheless the ministry also said it remained ready to negotiate a restructuring deal with Russia.

The International Monetary Fund has changed its policy to allow it to continue lending to countries in arrears, but to qualify, Ukraine must demonstrate it is open to negotiating in good faith with Russia on a deal.

The two-year 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.

Reporting by Alessandra Prentice; editing by Ralph Boulton

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