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Anvar Saidenov hopes for fast restructuring of BTA Bank

31 january 2012, 18:05
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Chairman of the Board of BTA Bank Anvar Saidenov. Photo by Vladimir Dmitriyev©
Chairman of the Board of BTA Bank Anvar Saidenov. Photo by Vladimir Dmitriyev©
Chairman of the Board of BTA Bank Anvar Saidenov hopes that negotiations on the second restructuring of the bank’s debt will be completed faster than last time, Interfax-Kazakhstan writes.

“The previous negotiations lasted for 18 months and were quite tense. I think that based on the experience of the previous negotiations, we will manage to complete the current ones much faster,” he said in the Portrait of the Week show on KTK TV channel.

“In the nearest time it is the most important for us that the creditors agree to gather in the Creditors Commission with, say, 12 participants representing different groups, as soon as possible. The bank has to officially approve this commission and start negotiations. I think that this time they can finish much faster. Upon their successful completion the bank will be able to function normally and will look into the future quite confidently,” he stressed.

Last Thursday BTA Bank’s shareholders failed to make a decision on the second restructuring of the debt because of disagreement of the minorities. In the end of 2011 BTA Bank announced the plans for another restructuring of its debt and said that the issue would be reviewed at the general meeting of the bank’s shareholders on January 26, 2012 in Almaty. Back then Samruk-Kazyna, the major shareholder of the bank, stated its support of the bank’s suggestion on restructuring.

The new restructuring is to affect the obligations to the creditors that the bank undertook after the restructuring of 2010.

Recently Fitch Ratings downgraded Long-Rerm Issuer Default Ratings (IDRs) of BTA Bank from C to RD. “Lowering of the ratings confirms the fact of expiry of the grace period on January 18, 2012. During that period coupon payments of $165 million could have been made by the bank, but were not made. BTA Bank confirmed its intention to pursue a new restructuring its obligations on senior unsecured and junior bonds for the total amount of $3.5 billion,” the agency’s message states.

Fitch confirmed the senior unsecured rating of BTA Bank at C level, because defaulted obligations are not normally rated as RD and D and are ranked B or C depending on the outlook of the money return on such obligations.

According to the acting chairman of the bank Askhat Beissenbayev, the need to restore the bank’s own capital through the planned restructuring of a part of its debt is the main reason for the suggestion of non-payment of interest on the bonds.

“Admitting the urgent need for restoration of the bank’s own capital and its successful long-term functioning, we have initiated this restructuring process. We are trying to get an approval for initiation of the restructuring process. Under this process the payment of coupons becomes a secondary goal, i.e. it has to become the subject of negotiations with the creditors. It cannot be viewed outside of the context of the restructuring process. I think that this is the main reason why the coupon should not be paid,” he noted.

BTA Bank, defaulted in 2009. In September 2010 BTA Bank completed the first restructuring of its debt. As a result, the bank’s debt was reduced from $16.65 to $4.2 billion. After the restructuring it is controlled by Samruk-Kazyna state fund (81.48 percent). The bank’s creditors received over 18 percent of shares after the restructuring.

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