Kazakh paper offers bank own bonds for damages

A Kazakh opposition newspaper has offered to pay court-mandated damages to state-run bank BTA using BTA bonds on which the bank has defaulted, and also threatened to seek the lender's bankruptcy.

 

 

A local court this month found the Respublika weekly guilty of causing a run on deposits at BTA and ordered the newspaper's owner, publisher and editor-in-chief to pay the bank about $133,000 each.

 

On Tuesday, the newspaper said in a statement its publisher and editor were ready to pay the bank, but not in cash. Instead, they were offering BTA its own Eurobonds at nominal value.

 

BTA, nationalised in February, went into default in April citing early redemption demands by creditors and large losses. BTA bonds now trade at about 20 percent of face value.

 

If BTA refuses to accept the bonds as payment, Respublika said it would file a lawsuit seeking BTA's bankruptcy.

 

BTA asked creditors this month to slash $8 billion off its $10 billion debt. Kazakhstan's banking regulator has so far supported its efforts to restructure the debt.