The ad hoc committee, representing Ukraine’s international commercial creditors, has refused to change its proposal on the restructuring of Ukraine's debt, which the Finance Ministry still considers unacceptable, reads a statement issued by the Finance Ministry after a phone call with the ad hoc committee on June 5.

"The committee’s proposal to offload their sovereign claims into the books of the National Bank of Ukraine is unacceptable as it assumes using the National Bank of Ukraine’s reserves, in clear violation of Ukrainian law, and more generally in clear contradiction with Central Banks best practices," reads the statement.

The ministry reiterated the need for the creditors to enter into a dialogue regarding appropriate burden sharing by creditors, consistent with the International Monetary Fund's EFF program, reads the report.

Ukrainian Finance Minister Natalie Jaresko expressed her willingness to meet directly with the creditors and encouraged the committee to remove artificial and counterproductive barriers to more constructive dialogue.

After the IMF endorsed a new four-year extended fund facility for Ukraine for $17.5 billion, the Finance Ministry started consultations on debt restructuring with creditors for about $23 billion on March 13 to save about $15.3 billion on payments while the program remains in effect.

Ukraine has engaged Lazard Freres SAS as a financial adviser and White&Case as a legal adviser. The creditors committee has been formed of five major holders of the Ukrainian debt, advised by Blackstone and Weil Gotshal.

The Ukrainian Finance Ministry has said repeatedly that, to attain the IMF program's targets, not only should the debt clearance deadlines be extended, but also, part of these debts should be written off and the interest should be lowered, except for the loan participation notes issued by Oschadbank, Ukreximbank, and Ukrzaliznytsia.

However, the major holders of Ukrainian bonds are unwilling to agree to the cancellation of the principal debt, arguing that the size of the debt relief proposed is too big. Russia has also demanded the repayment of its $3 million loan to Ukraine by the end of 2015, refusing to agree to its restructuring.

The creditors committee reported on May 18 that it consisted of funds governed or represented by BTG Pactual Europe LLP, Franklin Advisers Inc., TCW Investment Management Company and T. Rowe Price Associates, Inc. and had regular contacts with the other holders of Ukrainian bonds, which hold in aggregate over $10 billion worth of Ukrainian debt. The creditors once again objected to writing the debt off.

To intensify the negotiations, the Ukrainian government passed a bill through the Verkhovna Rada on May 19 entitling it to suspend payments on debts included in the restructuring perimeter. The bill took effect on May 31.

The committee of creditors expressed their disappointment with the result of talks held on June 5. The committee said that its latest proposal made in May means the reduction of payments on the debt by $15.8 billion, which is even more than the IMF requires ($15.3 billion in four years).