The Development Bank of Kazakhstan, a state-owned lender, is seeking a probe by law-enforcement authorities into an alleged "misappropriated" use of $10 million borrowed by units of Kazakhstan Kagazy Plc, Bloomberg reported.
The bank turned to authorities after a technical audit to review a request by Kagazy, the largest paper producer in Central Asia, to restructure $70 million of debt, the Astana-based lender said in an e-mailed statement today.
Nelli Kim, a spokeswoman for Kagazy, declined to comment immediately when contacted by Bloomberg News in Almaty. The company may issue a statement later today, she said.
The bank declined the plan to restructure debt of two Kagazy units, AO Astana Contract and TOO Paragon Developments, which oversee a container and warehouse terminal in Almaty, according to the statement.
Kagazy, which was barred from selling 12 billion tenge ($82 million) of domestic bonds last April after the company failed to make coupon payments on previously issued bonds, sought last year to restructure 15.6 billion tenge of total debt.
Kagazy agreed to extend the maturity of its $37.2 million bonds from 2013 to 2028, the company said on March 1. It also reached an agreement with Alliance Bank, the second biggest Kazakh lender to default in 2009, to extend maturity and cut interest rate for $29.3 million loan in November.
...