Baku, Azerbaijan, August 4
By Elena Kosolapova - Trend: Kazakh Alliance Bank has agreed with the steering committee of its creditors a non-binding term sheet for the restructuring of approximately $1.2 billion of its financial indebtedness, the bank reported.
The debt restructuring will help ensure the capital restoration of the bank and pave the way for its proposed consolidation with Temirbank and ForteBank into Combined Bank, according to the bank.
The Steering Committee comprises Greylock Capital Management, LLC, J.P. Morgan Securities plc, LIM Advisors Limited, Pioneer Investment Management Limited and VR Global Partners, L.P.
The bank will be relieved from debts to its creditors holding senior Discount Notes, senior Par Notes, Recovery Notes and Subordinated Notes, who, subject to the approval of the Restructuring and the contemplated consolidation by the requisite majorities, will exchange their notes for a package of New Notes issued by the bank, equity in the Combined Bank and cash.
The New Notes will have a principal amount of $236.6 million.
If the restructuring is approved, holders of the bank's Discount Notes due 2017 will receive a cash payment of $50 million of the accrued and unpaid interest at the rate provided in the Discount Notes for the period between 25 September 2013 and 25 October 2014, $175.6 million in principal amount of New Notes and equity in the Combined Bank representing a pro-forma value of approximately $61.4 million. If the closing date is delayed beyond 25 October 2014, in addition to receiving their contractual interest until closing, the amount of cash payable in respect of the Discount Notes shall be increased by $0.5 million per month from 25 October 2014.
The holders of the bank's Par Notes due 2020 will receive a cash amount of $8.1 million representing the accrued and unpaid interest at the rate provided in the Par Notes for the period between 25 September 2013 and 25 October 2014, $61 million in principal amount of New Notes and equity in the Combined Bank representing a pro-forma value of approximately $21.4 million. If the closing date is delayed beyond 25 October 2014, in addition to receiving their contractual interest until closing, the amount of cash payable in respect of the Par Notes shall be increased by $0.2 million per month.
The holders of the bank's Recovery Notes due 2020 will receive $41.8 million in cash and the holders of the bank's Subordinated Notes due 2030 will receive equity in the Combined Bank representing a pro-forma value of approximately $6.7 million.
The bank's main shareholder, Kazakh Sovereign Wealth Fund Samruk-Kazyna, will support the transaction through the conversion of 66.3 billion tenge (182.08 tenge = $1) of existing and at least 11.9 billion of new deposits with the bank into a 10-year Special Term Deposit bearing interest at 4 percent per annum.
Edited by C.N.
