Astana Finance Creditors Back $1.9 Billion Debt Restructuring

Jul 3. Bloomberg

By Nariman Gizitdinov

Astana Finance Creditors Back $1.9 Billion Debt RestructuringAO Astana Finance’s creditors backed a plan to restructure $1.9 billion of debt, triggering losses for the Kazakh financial company’s international investors.

Creditors who hold 79.6 percent of the company’s debt approved the plan in Almaty on June 29, according to the minutes of a meeting posted yesterday on its website.

Astana Finance became the third Kazakh financial company to default after it stopped servicing its international debt in May 2009. BTA Bank, Alliance Bank and Temirbank restructured about $20 billion in debt after also defaulting that year. State-owned BTA is seeking to restructure its debt for the second time in as many years.

Astana Finance will distribute $100 million in cash to international creditors, issue $75 million of one-year zero- coupon bonds, and issue at least $165.6 million of bonds due 2016 according to the minutes of the meeting.

In addition, international creditors will get at least 60 percent of the company’s stock and $50 million of 12-year recovery notes, granting them a share of anything recovered from impaired assets, the minutes show. Astana Finance said in a July 2009 presentation that it owed 172.2 billion tenge ($1.2 billion) to global creditors including export credit agencies.

Senior domestic creditors will receive 14.8 billion tenge of bonds, while subordinated domestic debt holders will get 5.4 billion tenge of securities, according to the minutes.

Claimants with “operational debt claims” will be entitled to a cash payment of 15 percent of their outstanding claims, payable in tenge, the minutes show.

Astana Finance is seeking buyers for its two banking subsidiaries, Bank Astana Finance and AF Russia, according to a memorandum posted on its website last month.

The company is 25.5 percent government-controlled Kazakhstan Stock Exchange data show. Astana Finance said in September that former Chairman Kintal Islamov is being investigated in connection with alleged theft of company funds.