Russia cannot begin collecting the $3 billion in eurobond debt which Ukraine acquired in December 2013 through funds from Russia’s National Welfare Fund (NWF) before an appeals decision is reached, Russia’s Finance Ministry said in a statement.
On July 26 the higher court of London specified its verdict from March 29 where it ruled in favor of Russia on a case submitted in relation to Ukraine’s default on $3 billion of eurobonds, Russia’s Finance Ministry said.
The court ordered Ukraine to pay Russia the nominal value of the bonds worth $3 billion and an unpaid coupon of $75 million and penalty interest on the sum. The interest rate on the principle part of the debt totaled 8 percent per year, while interest on the unpaid coupon is three-month LIBOR in dollars plus 2 percent per annum, the Finance Ministry said.
Payment on default interest will be calculated from December 21, 2015 and will continue until all the obligations are fulfilled. “This means that each overdue day will cost the Ukrainian government over $673,000,” the Finance Ministry said.
In addition, the court in London ordered Ukraine to pay Russia a portion of expenses connected with court proceedings totaling 2.8 million pounds. Half of that sum needs to be paid by September 20, 2017. The court said that Russia’s request to be compensated for the remaining portion of expenses would be reviewed following Ukraine’s appeal of the London’s court’s decision.
The appeals process is planned for January 2018.
“Due to the short amount of time until the appeals process, the higher court of London, as expected, has excluded the possibility of adopting measures requiring Ukraine to pay back the borrowed funds until a verdict in the appeals process is made,” the Finance Ministry said.
“The Finance Ministry believes that the facts established by the higher court of London form a necessary and sufficient basis for the appeals court to rule in favor of Russia,” the statement said.
