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LONDON/MOSCOW, July 18 (Reuters) - International Bank of Azerbaijan (IBA) said a plan to restructure $3.3 billion of its debt won approval from creditors holding 93.9 percent of affected credits.
Claimants with 94.1 percent of the principal amount cast votes, the state-run bank said in a statement on Tuesday. Two-thirds support was needed for the plan to be adopted.
IBA creditors include domestic sovereign wealth fund SOFAZ, commodities trader Cargill, Italian lender Intesa Sanpaolo , Germany’s Commerzbank and Bayerische Landesbank and France’s Societe Generale. Several big asset managers are holders of its Eurobond.
IBA infuriated investors when it first unveiled the restructuring in May but, after modifying terms, offered them the chance to swap some holdings for sovereign bonds, with senior creditors holding some 2.4 billion given three options.
“The satisfactory outcome of IBA’s restructuring demonstrates that the plan supported by the Ministry of Finance serves the long-term interests of the Bank and of its creditors,” said Azeri Finance Minister Samir Sharifov in a statement.
Senior creditor SOFAZ will see its $1 billion exchanged for a new 7-year IBA bond under the plan. Among the remaining senior creditors, more than 92 percent opted to swap their IBA debt for a new 15 year sovereign bond, representatives for IBA said on a conference call.
Among junior bond holders, which held 100 million and were forced to take the highest haircut of 50 percent, the approval rate was still in excess of 85 percent, said IBA adviser Eric Lalo from Lazard on the call.
The success of the operation would help the government meet a target of privatising IBA by the end of 2018, according to the statement.
IBA Chairman Khalid Ahadov added on the call that he the lender had been approached by certain financial institutions already.
“They have been waiting when the restructuring process will be successfully over, so after that they will start an official process with us,” Ahadov said.
A global slump in oil prices has battered the economy of the former Soviet republic, in turn hurting Azerbaijan’s manat currency and local banks.
Also speaking on the call, Ian Clark from IBA’s legal adviser White & Case LLP said there had been no contact with a group of creditors in New York, who had filed an objection against the restructuring plan in June.
Asset managers Fidelity Management & Research Company and Franklin Templeton Investment Management Ltd and hedge funds Promeritum Fund SPC and VR Global Partners LP are members of that group, which holds some $220 million worth of IBA bonds. (Reporting by Karin Strohecker in London and Alexander Winning in Moscow; Editing by John Stonestreet/Jeremy Gaunt)
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