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. Last Updated: 07/27/2016

London Club Talks Resume As Date for Payment Looms

FRANKFURT, Germany -- Russia started another round of talks with its London Club of private creditors Tuesday in a bid to clinch a deal to restructure $32 billion of Soviet-era debt before a crucial Dec. 2 deadline.

Earlier Tuesday, Finance Minister Mikhail Kasyanov, who heads the Russian delegation, said it might not be possible to wrap up the talks by the end of the day.

Russia is eager to strike a deal before Thursday when a $550 million coupon payment on the debt falls due.

Kasyanov was reported by Itar-Tass as saying that there were still "significant differences of opinion on a number of main parameters" between the two sides.

He added that he and his team were prepared for "a serious and constructive dialogue."

Russia and the London Club failed to reach a breakthrough during the previous round of talks in London last week.

However, Russian officials have said they managed to narrow differences and suggested talks were entering their final stretch.

A spokesman for Deutsche Bank, which chairs the creditors' group and is hosting the eighth round of talks, said the negotiations were likely to continue Wednesday.

A group of U.S. bondholders has threatened to sue Russia for nonpayment if significant progress is not made by Thursday, the due date for the coupon payment.

Central to the talks is Russia's request for a 40 percent debt write-off, the level of which has so far not been agreed yet.

The London Club is an ad hoc group of commercial bank creditors.

In return for the debt write-off, the club wants the debt restructured into a more senior Eurobond guaranteed by the Russian Federation rather than Vneshekonombank as it is at the moment.

The bank is the paying agent for the debt and its head, Andrei Kostin, is participating in the negotiations.