TALKS between Ukraine and a creditors’ committee aimed at agreeing a restructuring of Kiev’s huge debts are accelerating and the two sides will hold a teleconference June 5 to assess progress, the Ukrainian finance ministry said Friday.

    Near-bankrupt Ukraine is in negotiation with bondholders to restructure sovereign and state-guaranteed debt to plug a US$15.3 billion funding gap and keep on track to receive credit under a US$17.5 billion International Monetary Fund (IMF) bailout program.

    The former Soviet republic, whose national reserves have been sapped by economic mismanagement, corruption and now war with Russian-backed separatists in the east, is pressing its creditors to accept a writedown on principal owed as part of a restructuring deal.

    It says it will not be able to meet the targets set out in the IMF-led rescue package without cutting the bonds’ principal.

    But a creditors’ committee, led by Franklin Templeton and representing about US$9 billion of debt, resists the idea of a writedown — or “haircut” — of the bonds’ principal.

    It has put forward a plan that would save Ukraine US$15.8 billion, or more than what it is aiming for, via extending bond maturities by up to 10 years and by cutting coupon payments in initial years, a source familiar with the situation told Reuters on Friday.(SD-Agencies)