KazMunaiGaz National Co., a Kazakh state-owned oil and gas producer, withdrew $1 billion from BTA Bank in September on concerns that access to its deposit was "limited," and used the money to redeem bonds and make loans.
Although KazMunaiGaz bank deposits "were not at any time legally frozen, the company's management believed that the access to the deposits was limited in practice," KazMunaiGaz said today in a prospectus for a $7.5 billion bond program published on the Kazakhstan Stock exchange website.
KazMunaiGaz had deposits of $8.2 billion in Kazakh banks as of June 30, including $3.4 billion in Halyk Bank, $2.6 billion in Kazkommertsbank and $1 billion in BTA, the energy company said. KazMunaiGaz reduced its deposits as of Sept. 30 to $7.2 billion, including $2.6 billion with Kazkommertsbank, $2.4 billion with Halyk and nothing at BTA.
The National Wellbeing Fund Samruk-Kazyna took control of BTA, the nation's largest lender at the time, and bought stakes in Kazkommertsbank and Halyk Savings Bank in early 2009 after credit markets froze and Kazakhstan's property bubble burst. Three of four defaulted Kazakh lenders -- BTA, Temirbank and Alliance Bank -- reached restructuring deals with creditors, allowing them to write down debt of about $11 billion.
Restructuring Efforts
"The restructured banks are in the early stages of their post-restructuring operations, however, and there can be no assurance that the restructuring efforts in respect of the Kazakhstan financial sector will ultimately be wholly successful and that the banks with which the company has deposits, and possibly others, will, accordingly, not become bankrupt," KazMunaiGaz said.
KazMunaiGaz didn't respond to an e-mailed response to questions about the deposits today. Adil Dosymov, an Almaty- based spokesman for BTA Bank, declined to comment immediately.
KazMunaiGaz's withdrawals from BTA have been offset by an inflow of corporate deposits from other companies, said Milena Ivanova-Venturini, head of research for Central Asia at the Almaty unit of Moscow-based Renaissance Capital.
"So it may be that while KazMunaiGaz has been withdrawing money, other state-related entities have more than offset such withdrawals," Ivanova-Venturini said. "Therefore I wouldn't question the commitment of the state to BTA."
KazMunaiGaz's withdrawal of funds "tells us, at least at face value, that the fear of some investors that the company's money is effectively locked up in Kazakh banks may be exaggerated at this point in time," she said.
To contact the reporter on this story: Nariman Gizitdinov in Almaty at
