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Halyk Bank may give up on BTA deal

Friday, 21.06.2013, 11:42
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Halyk Bank may give up on BTA deal
Halyk Bank of Kazakhstan. ©Yaroslav Radlovskiy
The deal to purchase BTA by Halyk Bank may take longer than planned, Tengrinews.kz reports.

One shouldn’t rule out the possibility of Halyk Bank giving up on the idea of purchasing BTA in case the country’s Government [that owns BTA through Samruk Kazyna Sovereign Wealth Fund] doesn’t offer concessions in terms of price, Tengrinews.kz reports, citing Artyom Ustimenko, analyst with the Agency for ROI Studies as saying.

Earlier tengrinews.kz reported, citing Halyk Bank Chairman of the Board Alexander Pavlov, that purchase of BTA by Halyk Bank and sales of Halyk Bank’s pension fund [to the Government] should be separate deals. Both deals should be closed without any pressure, at a fair price. In any case, these should be monetary deals, rather than a barter deal”.

“BTA remains a high-risk asset. It should be sold at a significant discount. With an attractive ask price, Halyk Bank hopes to get full control over BTA, rather than a minority stake. With no other interested buyers in place, Halyk Bank is the only potential buyer acceptable for the Government”, Mr. Ustimenko believes.

“As far as sales of the Halyk Bank’s pension fund sales are concerned, Halyk Bank doesn’t think it could be exchanged for the Government’s stake in BTA (…) sales of the pension fund that is effective and profit-making is more expedient for Halyk Bank from the financial perspective”, he said.

According to Anton Soroko, analyst with Russia’s Finam Consultancy, Halyk Bank wants two separate deals to secure the maximum possible discount when buying BTA: in case of exchange it would be much harder to secure.

“Halyk Bank’s pension fund is holding strong positions, possesses imposing assets (…) BTA calls for substantial investments on the part of any potential buyer; this circumstances complicates valuation of BTA (…) there is a high probability Halyk Bank will succeed in making sure these deals are separate”, according to Mr. Soroko.

Olzhas Khudaibergenov, Director for Center of Macroeconomic Studies, believes that Halyk Bank’s pension fund could be valued higher than the Government’s stake in BTA. “However, if the planned audit shows that the assets of the two entities are equal in terms of price, the much-talked-about exchange will be more probable; even if the pension fund is valued higher, the decision will depend on the Government’s willingness to pay the difference. Now the Government is trying to exchange its stake in BTA for the Halyk Bank’s pension fund, saying the assets are of equal worth”.

Back in February 2013 President Nazarbayev commissioned the Government to make sure Samruk-Kazyna Sovereign Wealth Fund exits the earlier bailed-out BTA, Alliance and Temir banks before the end of the year.

Samruk-Kazyna made Halyk Bank an offer to purchase BTA March 27, 2013.

Following the Government’s bail out, BTA defaulted on $12bn of debt and agreed a restructuring that saw foreign creditors take a $7bn haircut. A second restructuring for another $11bn was concluded late last year.
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