Bloomberg News

Kazakh Wealth Fund Sees Injections Into BTA as ‘Inevitable’

January 27, 2012

(Updates with Deputy CEO comment in second paragraph.)

Jan. 27 (Bloomberg) -- Kazakhstan’s sovereign-wealth fund, the majority owner of BTA Bank, said the need to inject funds into the lender, which is seeking a second debt restructuring in as many years, is “inevitable.”

This “won’t necessarily be a capital injection, other forms are possible,” Yelena Bakhmutova, deputy CEO of the fund, known as Samruk-Kazyna, told reporters in Astana today. The possibilities include less expensive government funding and higher coupons on Samruk-Kazyna bonds that the bank now holds, she said, without elaborating on the timing.

“The amount of injections hasn’t been determined yet,” she said. “We must find mutually acceptable decisions for the creditors and shareholders and for the survival of the bank.”

BTA Bank said yesterday it will push ahead with debt restructuring talks even after failing to gain sufficient votes from holders of global depositary receipts to begin the process. The lender missed a coupon payment at the start of this month on its July 2018 dollar bonds. It has reiterated a pledge to exempt depositors from restructuing.

Samruk-Kazyna took control of BTA in February 2009, two months before the central Asian nation’s largest lender at the time defaulted on $12 billion of debt.

“Samruk-Kazyna will carry out the injection if all sides are certain that the bank is viable after restructuring,” Bakhmutova said. In addition to the restructuring, BTA needs to improve its business-model to be competitive in the “hard Kazakh banking market,” Bakhmutova said.

Kazakh lenders should prepare for a coming crisis, President Nursultan Nazarbayev said today at a government meeting, while calling for regulators to ensure the stability of the local currency.

--Editors: Torrey Clark, Alan Crosby

To contact the reporter on this story: Svetlana Antoncheva in Astana, Kazakhstan at santoncheva1@bloomberg.net

To contact the editor responsible for this story: Hellmuth Tromm at htromm@bloomberg.net


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