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Kazakh state fund backs BTA bank's debt rescue plan

Thu, 5th Apr 2012 17:23


By Dmitry Solovyov and Raushan Nurshayeva

ALMATY/ASTANA, April 5 (Re
uters) - Troubled Kazakh bank BTA's biggest shareholder, the state investment fund, said on Thursday it would press ahead with a debt restructuring plan and dismissed suggestions that the bank should instead be allowed to fail.

Kazakhstan's third-largest bank by assets, which is majority owned by the sovereign wealth fund Samruk-Kazyna, defaulted on a $2 billion, 2018 Eurobond in January, only 18 months after a first round of restructuring cut its debt by two thirds.

Earlier this week BTA announced the formation of a steering committee of creditors to discuss the restructuring of the Eurobond debt.

Samruk-Kazyna's head Umirzak Shukeyev said the fund was determined to complete BTA's debt restructuring.

'We have stressed that it is part of our group, and we will support this bank,' he told a news conference in the capital Astana. 'The bank now makes all payments without delays and its deposit base is stable.'

'I would be even more optimistic about the bank's medium-term prospects,' Shukeyev said on Thursday, marking his first 100 days at the helm of Samruk-Kazyna which at the end of last year controlled assets worth around $90 billion.

The remarks by Shukeyev, who replaced President Nursultan Nazarbayev's son-in-law Timur Kulibayev as the fund's head, follow this week's sharp criticism of BTA's planned restructuring by Umut Shayakhmetova, chief executive of Halyk Bank, Kazakhstan's biggest lender by assets.

Shayakhmetova said on Tuesday that bankruptcy would be a better solution for BTA than a costly debt restructuring at the expense of taxpayers.

'My opinion is: a horrible end is better than unending horror,' she told a news conference. 'Most probably, that first scenario of restructuring did not quite work.'

Halyk, controlled by Kulibayev and his wife Dinara, and other banks benefited after BTA defaulted on its debt in January. Shayakhmetova said that more than 100 billion tenge ($674 million) in BTA deposits had flown into the vaults of rival banks after the default.

She said the state had already provided support to BTA worth over $7 billion and a new debt restructuring could be worth $5 billion or more.

'Now, the question is: if you spend $12.5 billion to support BTA, which today no longer forms the core of the banking system, how expedient is this, and is the game worth the candle?' Shayakhmetova said.

BTA's chairman Anvar Saidenov, speaking to reporters in the financial capital Almaty on Thursday described Shayakhmetova's comments as 'tactless', while Shukeyev dismissed what he called 'emotionally charged statements by some bankers'.

'Maybe, they see a competitor in this bank (BTA)? Well, this already inspires hope,' he said.

Saidenov said BTA will hold an emergency meeting of its shareholders On April 11 to elect a new board of directors, which will include two directors representing the creditors and could convene as early as April 16 or 17.



(Writing by Dmitry Solovyov; Editing by Greg Mahlich) Keywords: KAZAKHSTAN/BTA

(dmitry.solovyov@thomsonreuters.com)

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