BTA Still Seeks Debt Talks After Restructuring Fails to Pass
January 27, 2012, 10:30 AM ESTBy Svetlana Antoncheva and Denis Maternovsky
(Updates with quote from BTA Chairman Saidenov in seventh paragraph, deposits in 12th.)
Jan. 26 (Bloomberg) -- Kazakh lender BTA Bank said it will push ahead with talks to restructure its debt for the second time in as many years even after a shareholder meeting today failed to gain enough votes to begin the process.
The results of the meeting in Almaty are “certainly not an impediment to achieving restructuring and the bank will continue to take all the necessary steps,” BTA said in a statement. Majority owner Samruk-Kazyna, the Kazakh sovereign-wealth fund, couldn’t back any resolutions on the agenda as an insufficient number of depositary-receipt holders voted, it said.
Samruk-Kazyna “is committed to an orderly and consensual restructuring of the bank,” according to a separate statement e-mailed by the fund. It “supports the establishment of a steering committee to negotiate the terms of the restructuring of a certain part of the bank’s financial debt.”
Samruk-Kazyna took over BTA in February 2009, two months before the central Asian nation’s largest lender at the time defaulted on $12 billion of debt. BTA missed a coupon payment at the start of the month on its July 2018 dollar bonds, according to data compiled by Bloomberg.
Debt Moratorium
Today’s general shareholders meeting was convened to discuss non-payment of interest on bonds and a “moratorium on certain payments” to BTA’s creditors, excluding depositors, according to an earlier statement on the bank’s website.
In order for Samruk-Kazyna to support the moves, two-thirds of the holders of BTA’s London-listed global depositary receipts needed to vote in favor of the resolutions, BTA said today. Just under 18 percent of the GDR holders voted, representing 2.7 percent of the lender’s common stock, it added.
While the bank will probably announce the creation of a steering committee “in the nearest future,” it is premature to talk of restructuring options, BTA Chairman Anvar Saidenov said in a telephone interview today. The bank’s total debt outstanding is 590 billion tenge ($4 billion), he said.
Samruk-Kazyna, which has a stake of about 81.5 percent, said it’s “disappointed that a majority of the bank’s GDR holders have not been able to give their voting instructions.” Still, the fund plans to participate in restructuring talks once a steering committee is established “with a view to having the bank emerge as a viable entity post-restructuring.”
It reiterated a pledge to exclude depositors and their interest payments from any restructuring.
Restricted Default
Fitch Ratings downgraded BTA’s long-term issuer rating one level to “restricted default” on Jan. 20, citing the bank’s failure to pay its coupon by a Jan. 18 deadline.
BTA said Fitch’s decision was fair, calling restructuring “a necessary step to guarantee the continued normal functioning of the bank,” according to a statement the following day.
BTA’s Chief Executive Officer Askhat Beisenbayev warned Jan. 17 that the lender planned to skip the coupon payment because it has an “acute need to restore capital” and faces the risk of a run on deposits.
The lender’s total deposits fell 23.4 billion tenge in December to 745 billion tenge as of Jan. 1 is “likely” to see more outflows in January, according to Saidenov.
The bank is making a presentation to creditors tomorrow in London.
--Editors: Zoe Schneeweiss, Torrey Clark
To contact the reporters on this story: Svetlana Antoncheva in Belgrade at santoncheva1@bloomberg.net; Denis Maternovsky in Moscow at dmaternovsky@bloomberg.net
To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net
