BTA Bank (BTAS), the Kazakh lender that’s seeking to restructure its debt for a second time in as many years, said holders of recovery units asked for payment in full and ahead of schedule.
The lender received a “notice of acceleration” regarding its more than $5.2 billion “initial reference amount of recovery units” from BNY Mellon Corporate Trustee Services Ltd. as trustee for the holders of the units, BTA said in an e-mailed statement today.
“This action wasn’t unexpected for the creditors’ committee or the bank,” BTA said. “The creditors’ committee (including holders of recovery units) remains committed to cooperation with BTA to achieve a consensus decision on restructuring. The bank believes that this demand won’t have a major impact or influence on the restructuring talks.”
BTA said on April 23 that it had halted all payments on its recovery units. Creditors received 10-year recovery notes as part of a restructuring accord in 2010, under which they’ll get 50 percent of anything the lender recovers from impaired assets, including any award in a lawsuit against the bank’s previous management.
BTA bonds due in 2018 fell 5.3 percent today to $18.125, a fifth day of declines.
The state-controlled lender said that it filed an application with the Almaty Specialized Financial Court yesterday to begin restructuring under Kazakh law. The application included BTA’s restructuring plan, drawn up in collaboration with the creditors’ committee and approved by the former Soviet republic’s central bank.
Advisers to the creditors’ committee will conduct due diligence this month and negotiations will begin in June, according to BTA.
The Almaty-based lender is struggling to recover a major part of its loan portfolio in impaired loans and has filed a series of civil cases against former Chairman Mukhtar Ablyazov and ex-Chief Executive Officer Roman Solodchenko in U.K. courts.
Kazakh prosecutors issued arrest warrants for Ablyazov and Solodchenko in March 2009 on suspicion that they embezzled money from the bank and laundered it through loans to fictitious companies. The two former executives, who now live outside Kazakhstan, have denied the charges.
Assuming default judgments against Ablyazov in London, expected in June, BTA and receivers will take control or ownership of as much as $1 billion in disclosed assets belonging to the former chairman and undisclosed assets “possibly of the same order of magnitude,” according to a presentation on the lender’s website.
Companies linked to Ablyazov misled a London court and don’t have a valid defense to the lender’s case against them, a judge ruled on May 1.
Ablyazov fled the U.K. after being sentenced to 22 months in prison for breaching an asset-freezing order and lying under oath. His lawyers said Ablyazov fears for his safety, and that BTA’s lawsuits are politically motivated.
Kazakh sovereign-wealth fund Samruk-Kazyna took over BTA in February 2009, two months before the nation’s largest lender at the time defaulted on $12 billion of debt. BTA is seeking an agreement with creditors on its second restructuring by September, according to a March 22 presentation published on its website.
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