Published 14 June 2016. Some rules have changed since; ask us for the current position.
The Verkhovna Rada has adopted the Law "On Financial Restructuring" (Про фінансову реструктуризацію; bill No. 3555).
The law is intended to ease the debt burden on Ukrainian companies that are temporarily unable to repay creditors on time. It also simplifies rescheduling of debt, changes to interest rates, partial debt write-offs, new financing and similar arrangements.
The law also sets conditions for debtor companies to use tax incentives already provided in the Tax Code, in particular exemption from corporate income tax liabilities arising when creditors forgive part of a debt. Loans will still have to be repaid.
Related parties of the debtor company will be unable to influence the financial restructuring process.
Participation in financial restructuring is voluntary. It will proceed with the consent of all parties and on terms acceptable to all participants.
The Law on Financial Restructuring is temporary: it applies for three years from its entry into force. This period will allow the results of financial restructuring in Ukraine to be assessed and compared with other countries' experience. If the results are positive, the law may be extended.
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