Ukraine reaches preliminary deal with bondholder group on $20-billion debt restructure

Ukraine reaches preliminary deal with bondholder group on $20-billion debt restructure
A general view of central Kharkiv, amid Russia's attack on Ukraine. (Reuters/File)
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Updated 23 July 2024
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Ukraine reaches preliminary deal with bondholder group on $20-billion debt restructure

Ukraine reaches preliminary deal with bondholder group on $20-billion debt restructure
  • Ukraine’s finances are precarious as its 28-month war with Russia drags on. Russia’s 2022 invasion decimated its economy, leaving it heavily reliant on money – and military aid – from international partners

LONDON: Ukraine said on Monday it had reached an agreement in principle with a group of creditors to restructure $20 billion of international bonds, bringing the war-torn country closer to an unprecedented debt rework.
Ukraine’s announcement comes just over a week before a two-year debt suspension agreement struck in 2022 is due to run out and marks the first time a country has embarked on a debt restructuring during a full-scale war.
“After months of engagement and hard work with our private bondholders, the IMF and our bilateral partners, we have reached an agreement in principle with the Ad Hoc Creditor Committee on the comprehensive restructuring of our public external debt,” Finance Minister Serhiy Marchenko said in a statement.
This was an important step to ensure Ukraine maintained the budget stability and cash resources needed to continue financing its defense, he added.
Ukraine’s finances are precarious as its 28-month war with Russia drags on. Russia’s 2022 invasion decimated its economy, leaving it heavily reliant on money – and military aid – from international partners.
The US presidential election in November and the risk of wavering commitment to maintain support for Ukraine under a potential Donald Trump presidency increased pressure for a debt restructuring, sources close to the talks and analysts said.
The proposal would see a 37 percent nominal haircut on Ukraine’s outstanding international bonds, saving Kyiv $11.4 billion in payments over the next three years — the duration of the country’s program with the International Monetary Fund set to expire in 2027, according to government statements.
The government said the IMF had confirmed that the deal was compatible with the parameters of its $122 billion support package, and that the country’s official lenders, the Group of Creditors of Ukraine (GCU), had also signed off on it.
A spokesperson for the Paris Club of creditor nations, which usually handles communications for the GCU, confirmed the group was comfortable with the proposal.
The IMF welcomed the agreement and confirmed it is consistent with the current program, adding that it will be “essential to bring Ukraine’s debt burdens to sustainable levels, thereby ensuring room for critical spending and supporting growth.”
Ukrainian Prime Minister Denys Shmyhal said in a message on the Telegram app that the deal would free up resources for urgent needs, including defense, social protection and recovery.
A source at the Germany finance ministry welcomed the draft agreement and said it was a key step to preserve the Ukraine government’s ability to act and plan ahead.
The Ad Hoc Creditor Committee, which holds 22 percent of the country’s sovereign bonds, called the agreement “swift and constructive.”
“We are pleased to be able to provide significant debt relief to Ukraine, assist its efforts to regain its access to international capital markets, and support the future reconstruction,” it said in a statement.
RACING TO THE FINISH
Under the proposal, some of the new bonds issued would start paying a 1.75 percent coupon from next year, with payments stepping up to as much as 7.75 percent from 2034 onwards. Bondholders are also in line to receive a consent fee.
Interest payments had been a sticky issue in the talks. Bondholders sought financial inducement to agree to a rework, while Ukraine’s international partners such as Group of Seven nations and the IMF objected to large amounts of money being funnelled to private lenders and away from strained government finances.
Payments to bondholders under the deal would amount to less than $200 million through to end-2025.
While the bonds have a face value of $19.7 billion, Ukraine owes around $23 billion with past due interest.
The international bonds soared more than 5 cents after the announcement, with most maturities trading around the 35 cents mark and at their strongest in about two years.
Ukraine’s $2.6 billion GDP warrants — fixed-income instruments with payouts linked to the strength of economic growth — were not part of the restructuring, though the government said it would “ensure the fair and equitable treatment of holders of the Warrants.”
Bondholders will vote on the proposal in coming weeks. If enough sign off, the government will issue new bonds.
A first payment in the wake of the two year moratorium is due on Aug. 1, but Ukraine last week passed a law allowing it to miss payments — and enter debt default, even temporarily — while the agreement is finalized.
The debt deal would be Ukraine’s second in a decade triggered by its neighbor: Ukraine restructured in 2015 following Moscow’s annexation of Crimea.
“Once completed, this restructuring will also pave the way for Ukraine’s market re-entry as soon as possible when the security situation stabilizes to fund our country’s swift recovery and reconstruction,” Marchenko said in the statement.


Indonesia’s Bali moves to ban plastic bottles

Indonesia’s Bali moves to ban plastic bottles
Updated 03 February 2025
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Indonesia’s Bali moves to ban plastic bottles

Indonesia’s Bali moves to ban plastic bottles
  • Bali produces around 300,000 tons of plastic waste every year  
  • It was the first Indonesian province to ban single-use plastics in 2019 

JAKARTA: Indonesia’s Bali began banning plastic bottles on Monday, in a move aimed at tackling plastic pollution in one of the world’s most popular tourist destinations.

The island produces around 300,000 tons of plastic waste annually, more than half of which goes uncollected, including 33,000 tons that gets into Bali’s waterways. 

Under the new policy, plastic bottles will be banned across all government offices and schools in Bali. 

“We hope this policy will be implemented in full responsibility by all relevant parties for a green and sustainable Bali,” Dewa Made Indra, the province’s regional secretary, said in a statement. 

The policy also requires “school principals and teachers to serve as role models for students by using tumblers to reduce or eliminate plastic waste from food and beverage packaging.” 

In recent years, Bali’s plastic waste problem has made international headlines as iconic beaches were littered with trash during the peak of the monsoon season, when heavy winds and rain wash up pollution also from neighboring Java island.

Last month, clips of massive “trash waves” on the shoreline of Jimbaran beach went viral on social media, marking one of the year’s first instances of what has become an annual occurrence around the island. 

The issue is also a concern for the central government, with Indonesia’s Environment Minister Hanif Faisol Nurofiq taking part in Bali’s beach clean-up events twice last month. 

“It is urgent for the sake of environmental sustainability, and also considering that Bali is a barometer for tourism in Indonesia, so we must show that our country is dedicated to find solutions to the plastic waste management problem,” Ratna Hendratmoko, who heads the Natural Resources Conservation Center in Bali, told Arab News. 

Bali, an island known for its scenic natural beauty and rich traditional culture, draws millions of foreign tourists annually. In 2024, it welcomed more than 6.3 million international visitors — which is around half of the total number of such arrivals in Indonesia. 

In 2019, the Bali provincial government banned single-use plastics in an effort to tackle marine pollution, becoming the first Indonesian province to do so.

The latest policy, which mandates government officials to bring their own reusable water bottles, may be the first step to implementing an islandwide ban.  

“Our staff are committed to comply with this new policy,” I Made Rentin, head of the forestry and environment agency in Bali, told Arab News. 

“For now, we will strengthen implementation internally at the government level.”


Cautious optimism in Bangladesh as post-Hasina relations with Pakistan grow

Cautious optimism in Bangladesh as post-Hasina relations with Pakistan grow
Updated 03 February 2025
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Cautious optimism in Bangladesh as post-Hasina relations with Pakistan grow

Cautious optimism in Bangladesh as post-Hasina relations with Pakistan grow
  • Head of Bangladesh interim government has met Pakistani PM twice since taking office on Aug. 8
  • In 2024, Pakistani cargo ships began to arrive at Bangladesh’s main port for the first time in over 50 years

Dhaka: The ouster of Bangladeshi Prime Minister Sheikh Hasina last August has opened a “new horizon of opportunities” for diplomacy with Pakistan, analysts, political parties and members of the public said, as Dhaka and Islamabad move to befriend each other after decades of acrimonious ties.

The head of Bangladesh’s interim government, Nobel laureate Muhammad Yunus, has met with Pakistani Prime Minister Shehbaz Sharif twice since taking office on Aug. 8 after Hasina fled the country following a student-led popular uprising against her government.

Hasina’s government was hostile toward Pakistan but closely allied with India, where she remains exiled. While her removal from office was followed by the cooling of relations between Dhaka and New Delhi, exchanges with Islamabad started to grow.

“The recent developments, in terms of bilateral exchanges with Pakistan, are a process to normalize the relationship. For various reasons, it was below the normal level in the last 15 years. Now, an opportunity has been created to normalize the relationship, which is natural between two states,” Humayun Kabir, former Bangladeshi ambassador to the US, told Arab News.

“I believe India can approach this bilateral relationship normally if they choose to. From India’s perspective, there is no reason to view it negatively. We want the relationship between India and Bangladesh to be considered bilaterally, without being influenced by issues with Pakistan. Similarly, our bilateral relationship with Pakistan will continue independently of any issues with India. I think this approach will create a dynamic in the relationship within the broader context of South Asia.”

Political parties that were in opposition to Hasina’s Awami League party’s government — its archrival the Bangladesh Nationalist Party and the largest Islamist party Bangladesh Jamaat-e-Islami, which was banned during her rule — were both optimistic about growing Pakistan ties.

“During the previous regime, Sheikh Hasina maintained close ties with only one country. In her own words, she said: ‘What Bangladesh has given to India, India will remember forever.’ This foreign policy was not the right approach,” said Matiur Rahman Akand, spokesperson of Jamaat-e-Islami.

Nawshad Zamir, the international affairs secretary of the Bangladesh Nationalist party, also welcomed the fact that the two nations had “resumed normal relationship, like before.”

But the memory of the 1971 war for independence remains alive.

Jamaat-e-Islami was at the time an active political party and during the war was aligned with Pakistan, opposing the independence movement.

On the other hand, the Bangladesh Nationalist Party was founded by Ziaur Rahman, a prominent Bangladesh Forces commander and one of the leading figures of the independence war.

While for both parties the normalization of ties with Islamabad is a welcome development, ordinary Bangladeshis see it with a dose of caution.

“We can establish regional cooperation. And I think this is a chance to become a regional leader … (but) personally, I believe that Pakistan first needs to deal with the 1971 issue,” said Mustafa Musfiq Talukdar, student at Dhaka University.

“In 1974, (Pakistan’s then Prime Minister) Zulfiqar Ali Bhutto came to Bangladesh and he kind of apologized personally, but it wasn’t something formal. So, we demand a formal apology from Pakistan for everything they did in 1971.”

For Tamim Muntaseer, a Dhaka-based researcher, an official apology was also essential for the relationship to move forward.

“We have seen that a new horizon of opportunities with Pakistan has been created. And I think this should be supported in terms of justice,” he said.

“Bangladesh and Pakistan are aligned in terms of their regional economy, trade … We should also consider people-to-people relationships.”

Such exchanges have already been underway over the past few months. Since December, Pakistani artists have been performing in Dhaka, while Bangladeshi films have been screened at cinemas in Pakistan.

Pakistani cargo ships also began to arrive at Bangladesh’s main Chittagong port for the first time since the 1971 war.

“I am quite positive about the current developments between Bangladesh and Pakistan,” Tahmid Al-Mudassir Choudhury, another Dhaka University student, told Arab News.

“I am not saying that we must forgive everything. Still, we can keep a good relationship with Pakistan … We have seen that in cricket: Bangladeshi people supporting the Pakistani cricket team, and the people of Pakistan also supporting the Bangladeshi cricket team. We can celebrate those similarities, and this can bring the people of Bangladesh and Pakistan together.”


UN says shooting incident at Kabul compound killed one

UN says shooting incident at Kabul compound killed one
Updated 03 February 2025
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UN says shooting incident at Kabul compound killed one

UN says shooting incident at Kabul compound killed one
  • UN says gunshots were fired by member of Taliban’s security forces at multilateral agency’s largest compound 
  • Person killed was member of Taliban-run security forces who was outside the compound, unclear what provoked firing

ISLAMABAD: Gunshots fired by a member of the Taliban’s security forces at the United Nations’ largest compound killed one person and injured another in Kabul, the United Nations Assistance Mission in Afghanistan (UNAMA) said in a statement on Monday.

The incident took place on Sunday, it said.

The person killed was a member of the Taliban-run security forces who was outside the compound, the statement said without adding any details. The person injured was an international security guard contracted by the UN, it said.

“UN-contracted security guards did not return fire during the incident,” it said.

It was unclear what provoked the firing. Both the Taliban and the UN were investigating the incident.

Kabul’s interior ministry spokesman Abdul Mateen Qaniee confirmed that a Taliban guard was killed and one UN contractor suffered injuries.

Taliban authorities halted all movement in and out of the compound following the incident, UNAMA said, but those restrictions have now been lifted.

The compound houses the offices of multiple UN agencies, funds and programs, and accommodation for UN international staff members.


Ukrainian troops lose ground with fewer fighters and exposed supply lines

Ukrainian troops lose ground with fewer fighters and exposed supply lines
Updated 03 February 2025
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Ukrainian troops lose ground with fewer fighters and exposed supply lines

Ukrainian troops lose ground with fewer fighters and exposed supply lines
  • Moscow is set on capturing as much territory as possible as the Trump administration is pushing for negotiations to end the war
  • Ukrainian soldiers in Pokrovsk said that Russian forces switched tactics in recent weeks, attacking their flanks instead of going head-on

POKROVSK REGION, Ukraine: A dire shortage of infantry troops and supply routes coming under Russian drone attacks are conspiring against Ukrainian forces in Pokrovsk, where decisive battles in the nearly three-year war are playing out — and time is running short.
Ukrainian troops are losing ground around the crucial supply hub, which lies at the confluence of multiple highways leading to key cities in the eastern Donetsk region as well as an important railway station.
Moscow is set on capturing as much territory as possible as the Trump administration is pushing for negotiations to end the war and recently froze foreign aid to Ukraine, a move that has shocked Ukrainian officials already apprehensive about the intentions of the new US president, their most important ally. Military aid has not stopped, Ukrainian President Volodymyr Zelensky has said.
Ukrainian soldiers in Pokrovsk said that Russian forces switched tactics in recent weeks, attacking their flanks instead of going head-on to form a pincer movement around the city. With Russians in control of dominant heights, Ukrainian supply routes are now within their range. Heavy fog in recent days prevented Ukrainian soldiers from effectively using surveillance drones, allowing Russians to consolidate and take more territory.
Meanwhile, Ukrainian commanders say they do not have enough reserves to sustain defense lines and that new infantry units are failing to execute operations. Many pin hopes on Mykhailo Drapatyi, a respected commander recently appointed by Ukrainian President Volodymyr Zelensky as ground forces chief, to shift the dynamic and counterattack.
“The war is won by logistics. If there is no logistics, there is no infantry, because there is no way to supply it,” said the deputy commander of the Da Vinci Wolves battalion, known by the call sign Afer.
“(Russians) have learned this and are doing it quite well.”
Poor weather at the worst time
A combination of factors led Kyiv to effectively lose the settlement of Velyka Novosilka this past week, their most significant gain since seizing the city of Kurakhove in the Donetsk region in January.
Scattered groups of Ukrainian soldiers are still present in Velyka Novosilka’s southern sector, Ukrainian commanders said, prompting criticism from some military experts who questioned why the higher command did not order a full withdrawal.
The road-junction village is 15 kilometers (9 miles) from the neighboring Dnipropetrovsk region, where authorities have begun digging fortifications for the first time since Russia’s full-scale invasion in February 2022, anticipating further Russian advances.
Russia amassed a large number of infantry around Velyka Novosilka, soldiers there said. As heavy fog set in in recent days, Ukrainian drones “barely worked” to conduct surveillance, one commander near Pokrovsk told The Associated Press. Long-range and medium-range surveillance was impossible, he said. He spoke on condition of anonymity in order to speak freely about sensitive military matters.
“Because of this, the enemy was amassing forces … taking up positions, digging in. They were very good at it,” he said.
It was at that fateful moment that Russian forces launched a massive attack: Up to 10 columns of armored vehicles, each with up to 10 units, moved out from various directions.
Ukrainian logistics in peril
Key logistics routes along asphalted roads and highways are under direct threat from Russian drones as a result of Moscow’s recent gains, further straining Ukrainian troops.
Russian forces now occupy key dominant heights around the Pokrovsk region, which allows them to use drones up to 30 kilometers (18 miles) deep into Ukrainian front lines.
The Pokrovsk-Pavlohrad-Dnipro highway is “already under the control of Russian drones,” said the commander at Pokrovsk’s flanks. Russian forces are less than 4 kilometers ( 2 1/2 miles) away and are affecting Ukrainian traffic, he said. “Now the road is only 10 percent of its former capacity,” he said.
Another paved highway, the Myrnohrad-Kostyantynivka road, is also under Russian fire, he said.
This also means that in poor weather, military vehicles, including armored personnel carriers, tanks and pickup trucks, have to trudge through the open fields to deliver fuel, food and ammunition, as well as evacuate the wounded.
In a first-aid station near Pokrovsk, a paramedic with the call sign Marik said evacuating wounded soldiers once took hours, now it takes days.
“Everything is visible (by enemy drones) and it is very difficult,” he said.
New recruits are unprepared
Ukrainian soldiers in Pokrovsk said shortages of fighting troops are “catastrophic” and challenges are compounded by newly created infantry units that are poorly trained and inexperienced, putting more pressure on battle-hardened brigades having to step in to stabilize the front line.
Afer, the deputy commander, complained that new recruits are “constantly extending the front line because they leave their positions, they do not hold them, they do not control them, they do not monitor them. We do almost all the work for them.”
“Because of this, having initially a 2-kilometer area of responsibility, you end up with 8-9 kilometers per battalion, which is a lot and we don’t have enough resources,” Afer said. Drones are especially hard to come by for his battalion, he said, adding they only have half of what they need.
“It’s not because they have lower quality infantry, but because they are completely unprepared for modern warfare,” he said of the new recruits.
His battalion has almost no reserves, forcing infantry units to hold front-line positions for weeks at a time. For every one of his soldiers, Russians have 20, he said, emphasizing how outnumbered they are.
Back at the first-aid station, a wounded soldier with the call sign Fish was recovering from a leg wound sustained after he tried to evacuate a fallen comrade. He had moved him from a dugout to load him into a vehicle when the Russian mortar shell exploded nearby.
“We are fighting back as much as we can, as best as we can,” he said.


South Africa’s Ramaphosa to engage Trump over aid suspension

South Africa’s Ramaphosa to engage Trump over aid suspension
Updated 03 February 2025
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South Africa’s Ramaphosa to engage Trump over aid suspension

South Africa’s Ramaphosa to engage Trump over aid suspension

JOHANNESBURG: South African President Cyril Ramaphosa said on Monday that he looked forward to engaging with US President Donald Trump, after Trump said he would cut off funding for South Africa, citing land confiscations.
“We look forward to engaging with the Trump administration over our land reform policy and issues of bilateral interest. We are certain that out of those engagements, we will share a better and common understanding over these matters,” Ramaphosa said in a statement issued by the presidency.
“South Africa is a constitutional democracy that is deeply rooted in the rule of law, justice and equality. The South African government has not confiscated any land.”
Ramaphosa said except for PEPFAR aid, which constitutes 17 percent of South Africa’s HIV/Aids program, there was no other significant funding provided by the United States.