PRIMAKOV SIGNS ORDER OUTLINING GOVERNMENT’S DEBT RESTRUCTURING SCHEME.

Prime Minister Yevgeny Primakov signed an order Tuesday (December 15) on the government’s plan for restructuring Russia’s domestic debt–the treasury bills which were frozen last August 17. Details of the plan have yet to be revealed, however, though members of the government who met yesterday to discuss the restructuring process said to the finance ministry they would be made public today. It was reported earlier that the government will repay investors 10 percent of their T-bill holdings in cash, 20 percent in special zero-coupon securities which can swapped for equity in Russian banks or used to pay taxes, and 70 percent in long-term bonds carrying around 30 percent (ruble-denominated) annual interest (Russian agencies, December 15). One group of domestic investors, however, whom the government had required to invest part of their assets in state bonds, will get 30 percent of their investments back in cash, 20 percent in investment securities and 50 percent in coupon bonds.

Deputy Finance Minister Oleg Vyugin said Tuesday that the government order concerned only a plan to exchange the frozen T-bills for new bonds and that other issues, such as how foreign investors could repatriate the proceeds from the restructuring, would be addressed in further talks (Reuters, December 15). The Russian government’s total T-bill debt is around 280 billion rubles (US$14 billion). Roughly 30 percent of that amount is owed to foreign investors. Talks on restructuring the frozen debt have been going on for three months. Sources close to some of the Western creditors said the restructuring plan was not yet a done deal, and one expressed concern about “how sustainable any offer is, and where the cash will come from” (Moscow Times, December 16).

BORIS FEDOROV GIVES KIRIENKO GOVERNMENT POOR MARKS FOR LAST AUGUST’S DECISIONS.