OREANDA-NEWS. December 29, 2009. JSC BTA Bank is pleased to announce that it has successfully completed the main stage of negotiations with its creditors by signing in London, on December 7, an outline term sheet (Principal Commercial Terms Sheet) within the Financial Restructuring held by the bank.

“The signing of this document demonstrating absolute consent on all economic terms between the Bank and its creditors is a great stride toward the renovation of the financial institution, - said Anvar Saidenov, Chairman of the Board of JSC BTA Bank”. – Now we may easily state that the period of ambiguity for the bank is in the past. At present new complex tasks are in front of us the decision of which would allow reestablish key positions of BTA Bank in the market”.

In accordance with the signed document, depending on the category of the creditor within the restructuring, suggested options for creditors are arranged into four, main packages – so called of Senior Debt as well as two packages of Junior Debt.

The requirements on most bonds, bank loans and part of the debt instrument on Trade Finance in the amount of nearly USD  7.7billion will be included into the Senior Package 1. This debt Package will be restructured by paying out funds of USD  946 million, by issuing of new eight-year tenor debt instruments with 70.0% discount and fifteen-year tenor subordinated debt instruments. In addition, creditors will receive around 8.7% of the bank’s shares.

The requirements of export-credit agencies, BTA obligations to government and other state organizations as well as part of some liabilities in trade finance will be included into the Senior Package 2. The total sum of liabilities, restructured within the Package 2 amounts at USD 1.6billion. This package envisages issue of special debt instrument – so called Original Issue Discount Instrument (OID). Besides OID creditors will be suggested within the Package 2 fifteen-year tenor subordinated debt instruments in the amount of USD 105 million, about 1.8% shares of the bank.

In addition to that creditors of the abovementioned packages (Senior Package 1 and 2) will receive part of the means which the bank would get out of collecting problem assets including those coming through the court.

The third package of the senior debt (Senior Package 3) will include liabilities on trade finance in the amount of nearly USD 700 million. The Senior Package 3 envisages refinancing of liabilities through the new two-year Revolving Committed Trade Finance Facility (RCTFF).

The fourth package of the senior debt (Senior Package 4) anticipates for creditors on Islamic banking (USD 250 million). Within this package the debt will be cleared off by means in the amount of USD 54 million which forms about 21.5% of debts.

Two additional packages (Junior Package 1 and 2) envisage for Kazakhstani pension funds and holders of subordinated and without time-limit bonds of the bank. Subordinated debt instruments are proposed to pension funds in the amount of KZT 28 billion or USD 186 million equivalent (denominated in Tenge) with a twenty-year tenor. Holders of subordinated and without time-limit bonds (in total USD 1.1 billion) will receive about 4.5% shares of BTA.

The restructuring of BTA Bank should generate USD 11.13 billion of additional regulatory capital by debt decreasing and conversion of the part of the debt into the share capital. This step will be reached by joint efforts both creditors and Samruk-Kazyna (SK) as a main shareholder of the Bank. SK will convert into the share capital around USD 4.5 billion of BTA Bank’s debt. After the restructuring is completed, SK will own about 85% of the Bank’s shares and creditors about 15%.

On day of restructuring completion the volume of BTA debt liabilities to creditors should consist of USD 4.564 million, where USD 797 million will be the subordinated debt.

The BTA Bank restructuring plan with suggested options to creditors should be submitted to the Creditors Committee approval till March 23, 2010.