Kazakhstan's Temirbank's restructuring approval meetings postponed

By Caroline Salls

Pittsburgh, March 16 - JSC Temirbank's noteholder restructuring vote meetings have been adjourned to March 31 from March 16 because a quorum was not achieved at Tuesday's meetings, according to a news release.

Separate meetings will be held for the holders of Temirbank's $500 million of 9½% senior notes due 2014 and its $300 million of 9% senior notes due 2011.

Since the noteholders meetings were not held on Tuesday, the bank said a meeting of creditors was also adjourned to March 31 from Wednesday.

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.

Temirbank said holders of only 25% of each series of notes were at Tuesday's meetings.

If noteholder approval is received, the bond trustee will then vote in favor of the restructuring plan at the creditor meeting. 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.

The bank said previously that it 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.

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.

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

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