BTA Bank successfully completed restructuring of financial debt for the amount of $11.1 billion

---

---

In December 2012 BTA Bank JSC successfully completed the Restructuring Plan of $11.1 billion of the Bank’s financial indebtedness.  According to the plan, the Bank distributed more than 90% of entitlements to the claimants.
 
BTA Bank is a backbone bank of Kazakhstan, the major shareholder of which is the Government of the Republic of Kazakhstan, represented by “Samruk Kazyna”.  With over 1.2 million private customers and 132 000 corporate clients, which have in total have 22 brances and 222 units around Kazakhstan.  BTA Bank  have international representative offices in Russian Federation, United Arab Emirates, Great Britain and China.
 
As part of the Restructuring, designated financial indebtedness of the Bank subject to the Restructuring has been cancelled.  In consideration thereof, the creditors received cash in the amount of $16.9 million and New Notes in the amount of $750 million.  The Bank has also entered into a novation of its Revolving Committed Trade Finance Facility Agreement, under which the current commitments of the Bank total approximately $348 million.
 
Moreover, the Bank issued 597,286,607,949 common shares distributed in the form of Shares or GDRs, pursuant to the conversion of $1.189 million of deposits from Samruk-Kazyna and $19 million of the Bank’s subordinated debt into equity.  Further, the Bank has received a $1.592 million subordinated loan from Samruk-Kazyna (denominated in tenge) relating to the New Notes and RCTFF.
 
The Bank has been recapitalised by approximately $10 billion, as a result of:
 

• The conversion of $1.2 million of the Bank’s financial indebtedness into common shares and the distribution of shares and GDRs to subordinated debt holders;
• The cancellation of $9.44 million of other Claimants’ claims in exchange for a total of $1.62 million in cash and $750 million. 
• The additional capital created through the IFRS treatment of the USD $1.6 million loan from Samruk-Kazyna and the increase from 4 per cent to 6 per cent of the coupon on the existing Bonds of Samruk-Kazyna JSC.
• The Bank’s estimated equity and regulatory capital, calculated by the requirements of Basel II, as at 31 December 2012 comprise of 219.2 billion KZT and 195.7 billion KZT, respectively.  Owing to this, the Bank as at 31 December 2012 will have a new, sustainable capital structure with Tier 1 ratio of 21.8 per cent.  Further, this ratio will be maintained above 10 per cent.  Under Basel II based on the Bank’s business plan.
• The financial indebtedness of the Bank subject to the Restructuring has been reduced from approximately $11.1 billion to approximately $3.3 billion.  (Including approximately $600 million of deposits remaining in the Bank from Samruk-Kazyna JSC)
• Samruk-Kazyna has increased its majority shareholding in the Bank to 97.3 per cent, with the Claimants holding in aggregate 2.5 per cent and minority shareholders who held shares prior to the 2010 Restructuring now holding 0.2 per cent in aggregate of the Bank’s shares.

 
The Chairman of the Bank’s Management Board, Mr. Yerik Balapanov, commented on the implementation of the Restructuring Plan: “We are happy that our extensive work over the last few months has now come to a successful end.  The completion of the Restructuring Plan will now enable the Bank to fully focus on the implementation of work on creating effective financial institute.  We would like to thank all of our stakeholders, the Steering Committee, as well as our customers and partners for their support of the Bank.”
 
The Bank’s financial adviser during the Restructuring was Lazard Frères and its legal adviser was White & Case LLP.  The Bank was also advised by M.Favale-Tarter, LLC.  The Steering Committee was advised by Houlihan Lokey and Baker & McKenzie LLP, as financial and legal advisers, respectively.

M.Favale-Tarter, LLC was the Independent Restructuring Advisor to BTA, led by CEO and Founder, Marcia Elizabeth Christian Favale, who is also the Senior Advisor to the Prime Minister of Kazakhstan for matters relating to the financial system most notably the restructuring of the banks BTA Bank, Alliance Bank and Temir Bank as well as Astana Finance. She also advises on privatization and strategic mergers & acquisitions and programmes such as affordable housing. M.Favale-Tarter, LLC acts for other clients including an Iron Ore interest in Brazil, among other.