LONDON: Ukraine was unable to reach an agreement with a group of bondholders over restructuring some $20 billion of international debt during formal talks, it said on Monday, raising the spectre that the war-torn country might slip into default.

An agreement with holders of international bonds thatallowed Ukraine to suspend payments after Russia’s invasion in2022 ends in August.

Ukraine had been in formal talks with bondholders for nearlytwo weeks, seeking to restructure the debt in order to retainaccess to international markets while meeting InternationalMonetary Fund’s (IMF) demands to restructure.

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However, the government’s proposal and a counter proposal bybondholders showed large disparities between what the partiesexpected a restructuring to look like.

“Although Ukraine and the Ad Hoc Creditor Committee did notcome to an agreement on restructuring terms during theconsultation period, Ukraine and the Ad Hoc Creditor Committeewill continue engagement and constructive discussions throughtheir respective advisors,” the government said in a regulatorynews statement.

The government would also continue bilateral discussionswith other investors “with a view to making further progress andreaching an agreement in principle at the earliest opportunity,”the statement added.