BTA to start Debt Covenants Talks
Kazakhstan's largest bank, BTA, said it was preparing for "tense" talks with creditors to prevent early debt repayment claims following its nationalisation earlier this month.
In early February, the government bought a 75 percent stake in BTA through a capital injection of about $2 billion to help bolster the bank against the impact of the global financial crisis.
The takeover enables some BTA creditors to demand early debt repayment due to loan agreement clauses known as change-of-control covenants.
"As of today we have received one claim that has been put forward, and we intend to hold talks on this," Roman Solodchenko, BTA's deputy chief executive, told a news conference on Tuesday.
He said the claim came from an investor based "in the East", but declined to provide any other details.
Speaking at the same news conference, BTA Chief Executive Anvar Saidenov said the bank would start talks with other creditors to persuade them not to put up new claims.
BTA and its advisors will meet investors in London to discuss this later on Tuesday, he said.
"There may be a bit of a speculative mood among the creditors," Saidenov said. "But I think most of the creditors are reasonable investors who are looking to build long-term relationships and will behave rationally."
BTA's total outstanding foreign debt is about $12 billion, of which slightly less than $3 billion is due this year -- unless creditors make additional demands, Saidenov said.
"I count on these negotiations," Saidenov said. "They will be tense and will require a lot of work, but I hope they will be successful."
BTA has struggled to restore confidence among Kazakh depositors following nationalisation, a task made harder by the sharp devaluation of the local tenge currency just days after the takeover.
Deepening depositors' worries, former BTA chairman Mukhtar Ablyazov, sacked after the nationalisation, had lashed out at the government, accusing it of "corporate raiding".
Last Friday, BTA blocked all of its credit cards, provoking further nervousness among customers. Saidenov said the move stemmed from a planned processing system upgrade, but its timing was "an unfortunate coincidence".
Solodchenko said individual depositors had withdrawn about $700 million from the bank within the last two weeks alone.
"The outflow has now started to ebb," he said, according to Reuters.