Kazakhstan's Temirbank seeks bondholder OK for new restructuring plan

By Angela McDaniels

Tacoma, Wash., Feb. 22 - JSC Temirbank said the holders of Temir Capital BV's $300 million of 9% senior notes due 2011 and $500 million of 9½% senior notes due 2014 will be asked to approve the bank's restructuring plan at meetings on March 16.

The meeting of the 9% noteholders will begin at 4:30 a.m. ET, and the meeting for the 9½% notes will begin at 5 a.m. ET, according to news releases from the bank.

As previously reported, noteholders were going to vote on the bank's previous restructuring plan at meetings on Dec. 22, but the number of noteholders present was not enough to reach a quorum.

Under the current plan, noteholders will receive cash, 20% of the bank's common shares and new notes. The shares will be held directly or through a special-purpose vehicle.

The cash amount will be 19.701% of par for the 9% notes and 20.02642% of par for the 9½% notes and includes accrued interest.

Approval is needed from at least two-thirds of the 9½% noteholders and at least three-quarters of the 9% noteholders voting at the meetings, whether in person or by proxy. A quorum of at least two noteholders holding at least 75% of the notes outstanding is required for each meeting.

If noteholder approval is received, the bond trustee will then vote in favor of the restructuring plan at a creditor meeting on March 17. That meeting will include the holders of securities issued by the bank under Kazakhstan law, JSC National Welfare Fund Samruk-Kazyna, JSC BTA Bank and CoBank ACB.

If the noteholder meetings are delayed, the creditor meeting will be adjourned to March 31.

The bank expects that the restructuring, if approved by creditors, will be completed in the third quarter after it receives final approval from the FMSA and the Specialized Financial Court of Almaty.

The bank has until March 31 to receive creditor approval of its restructuring plan. The FMSA and the court approved the extension of this deadline from Dec. 30.

Once the restructuring is completed, Samruk-Kazyna will provide equity funding to Temirbank and become the bank's majority shareholder.

Other creditor treatment

The treatment of the bank's other obligations under the plan includes:

• Holders of domestic secured bonds issued by the bank will receive new Kazakh tenge-denominated secured domestic notes in exchange for 25% of the principal amount held. The coupon of the new notes will be 100 basis points over the domestic consumer price index, subject to a floor of 8% per year and a cap of 12% per year.

The remaining 75% of the principal amount of secured bonds will be amended to fix the coupon at 8% and to extend the maturity by 10 years. They will become unsecured and, if not already applicable, repayable in tenge;

• Domestic unsecured bonds will be amended to fix the coupon at 8% and to extend the maturity by 10 years. If not already applicable, they will become repayable in tenge;

• Deposits placed by BTA Bank will be modified to extend their duration by 10 years, to reduce the coupon to 8% and to convert any amount due in a currency other than tenge into tenge;

• Deposits placed by Samruk-Kazyna will be extended by six months;

• Amounts outstanding under the bank's compromised trade financing will be exchanged for a bilateral 2% loan that will be payable in a single bullet after 10 years; and

• Any default interest will be deemed satisfied in full or written off.

Questions may be directed to the international department of the bank (ir@temirbank.kz or 7 727 259 0528 or 7 727 258 7829). The information agent is Thomson Reuters (disclosures_fisi@thomsonreuters.com or contact Ellis Farrell at 44 207 542 8775, Christina Mermiga at 44 207 542 5836 or Melina Bobbio at 44 207 542 9013).

Temirbank is a financial institution based in Almaty, Kazakhstan, and a subsidiary of BTA Bank.

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