Kazakhstan

Kazakhstan's Alliance Bank, controlled by the oil-rich nation's sovereign wealth fund, will discuss the restructuring of its debt at a creditor meeting in London this week, a source at the bank said on Tuesday, Reuters reported. Alliance, the ninth-largest lender by assets among the Central Asian nation's 38 banks, defaulted on its debt in the aftermath of the 2008 crisis. Its dollar bonds fell to record lows earlier this year on fears that it was heading towards a second debt restructuring.

BTA, Kazakhstan's third-largest bank by assets, has won a vote by its shareholders, dominated by the state sovereign wealth fund, to restructure its $11.2 billion of debt, the second such agreement with creditors in as many years, Reuters reported. In its first restructuring in 2010 BTA had cut net debt by two thirds to $4.2 billion in a deal that bought sovereign wealth fund Samruk-Kazyna an 81.5-percent stake.

BTA Bank (BTA) exercised insufficient control and arranged payments to creditors in violation of a moratorium during its debt restructuring two years ago, according to a Kazakh government audit obtained by Bloomberg. The inspection, completed in February, found that the Almaty-based lender was breaching national legislation and bank regulations, a sign of an “inadequate level of control” on the part of BTA executives, the central bank’s financial oversight committee said in the document. The bank also arranged repayments that bypassed BTA itself, the regulator said.

Kazakh bank BTA has agreed a preliminary term sheet with creditors to restructure $11.2 billion of debt, the bank said on Wednesday, triggering a rally in its heavily-discounted bonds. Kazakh sovereign wealth fund Samruk-Kazyna, the bank's majority shareholder, agreed to convert its deposits into equity and issue a $1.592 billion interest-bearing subordinated loan, Reuters reported. Creditors will exchange their interests for a package of new notes and cash, BTA said in a statement.

BTA Bank, the Kazakh lender seeking to overhaul its debt for a second time, said a Ukrainian court recognized the restructuring proceedings and extended protection over its assets, Bloomberg reported. “This recognition is a part of the bank’s current restructuring process and the order follows successful applications for recognition made by the BTA in the U.K. and U.S., which were obtained on July 11 and Aug. 16, respectively,” the Almaty-based lender said in a statement e- mailed today.

Kazakhstan's third-largest bank by assets, BTA Bank JSC, said Friday it has begun formal discussions with the steering committee of its creditors on the proposed restructuring of $4.98 billion of its debt, Dow Jones reported. The bank's advisers presented a draft of its preliminary restructuring proposal to the steering committee during meetings held June 12 and 13 in London. The bank and the steering committee will also hold due diligence meetings in Almaty next week and discuss an agreed term sheet over the following two weeks.

A senior BTA Bank executive said his signatures were forged last year and used to backdate documents in the months the Kazakh lender sought to staunch a capital deficit that forced its second debt restructuring in December, according to three people directly familiar with the matter, Bloomberg reported. The official, who served on the bank’s management board, filed a complaint after discovering the fraudulent use of his electronic signatures in May 2011, the people said, declining to be identified because the information isn’t public.

Kazakhstan's BTA Bank , majority owned by the country's sovereign wealth fund, on Monday announced the formation of a creditors' steering committee to discuss debt restructuring after the bank defaulted on its $2 billion Eurobond, Reuters reported. The bank, which is restructuring debt for the second time in three years, said the steering committee would comprise holders of senior as well as surbordinated debt, Recovery Notes, discount notes as well as trade finance.

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.

Kazakhstan’s state-controlled BTA bank can expect a hostile reception when it meets creditors in London this week to discuss ways to dig itself out of yet another financial hole, the Financial Times beyondbrics blog reported. The bank, Kazakhstan’s third largest in terms of assets, admitted it was on the brink of default last month and invited shareholders to gather on January 26th to vote on a proposed debt restructuring – the second in less than two years.