Chernomyrdin, Ukraine Sign Accord on Debt Restructuring

KIEV -- Ukraine's Deputy Foreign Minister Kostantin Hryshchenko said Thursday the country's debt to Russia had been restructured during wide-ranging talks and a deal was reached by the two countries' prime ministers Wednesday.

"The issue of our state debt to Russia is closed," he told reporters after a briefing ahead of Russian President Boris Yeltsin's arrival in Kiev on Friday.

"Starting next year, Ukraine must pay about $600 million in restructured debt. These are not just words. This is real money that will be taken from the budget. It's a state debt."

Hryshchenko did not say whether this referred to an annual payment or over what period it would be paid.

Prime Minister Pavlo Lazarenko said after signing deals Wednesday on the Black Sea Fleet and economic cooperation with Russian Prime Minister Viktor Chernomyrdin that the two sides had also reached agreement on the debt issue, but he gave no details.

Hryshchenko said Ukraine had saved $520 million by taking fewer ships from the fleet than originally agreed under a 50-50 split accord with Russia. Once a second stage of the split is complete, Ukraine will physically have 18.3 percent of the fleet, based at Sevastopol on its Crimean peninsula.

Russian First Deputy Foreign Minister Boris Pastukhov said in Moscow earlier that Russia would pay $98 million to $100 million a year under the deal to keep their ships at the port for 20 years.

Hryshchenko and First Deputy Defense Minister Ivan Bizhan in Kiev declined to confirm the figure.

Russia has put Ukraine's state debt to Moscow, amassed mostly between 1992 and 1994 for energy supplies, at $3.5 billion. Ukraine has already signed a deal with Russian energy giant Gazprom restructuring its gas debt at $1.4 billion.