Kazakh BTA CEO sees compromise on debt cuts

Final debt cut may be between $8 bln and $4.9 bln

 

 

Kazakh state-run bank BTA BTAS.KZ does not rule out a compromise with creditors on the volume of debt cuts during restructuring, its Chief Executive Anvar Saidenov said on Friday.

 

"Of course there is a possibility that as a result of work of auditors ... the final scheme will be different from what creditors offered and from what we offered," he said.

Creditors of BTA this week offered to write down $4.9 billion of BTA's debt, or around 60 percent of what the bank had asked to cut. Saidenov said that would not be enough to ensure BTA is sustainable in the long run.

 

"According to our calculations, the (prudential) requirements will be met at the time the plan (proposed by the creditors) is implemented," he said.

"But starting from 2011 ... the Tier 2 capital adequacy requirement would be breached."

 

BTA has said earlier that the key issue in its talks with creditors was the volume of provisions against bad loans which the creditors considered excessive. The two sides have hired auditors to review the provisions.

Saidenov also said BTA was opposed to the creditors' proposal to cancel the existing equity before converting debt into new equity, reducing the government's stake and increasing that of creditors.

 

"From our point of view there should be no equity cancellation," he said.

 

Kazakhstan's banking regulator this week gave BTA and creditors until December 7 to reach an agreement and sign a term sheet, a legally binding document containing all the details of the restructuring.

The government took over BTA in February and accused its former managers of fraud, a charge they deny.

 

 

 

Reuters