December 27, 2012 / 2:46 PM / 5 years ago

Kazakhstan's BTA completes second debt restructuring

LONDON, Dec 27 (Reuters) - Kazakh bank BTA said on Thursday it had completed a restructuring that wipes out over 70 percent of its $11 billion debt and makes it almost fully owned by the country’s wealth fund.

This is the second debt restructuring in as many years for BTA which defaulted in 2009 during the global crisis, but was saved by a 2010 deal that cut debt by two-thirds and installed wealth fund Samruk-Kazyna as its 81.5 percent owner.

BTA, Kazakhstan’s third-largest bank by assets, said its financial indebtedness had been reduced to around $3.3 billion from about $11.1 billion. Samruk’s equity stake in the bank will rise to 97.3 percent.

This concludes the latest round of a debt saga that began when BTA defaulted on a Jan. 3 payment on a $2.1 billion 2018 bond. That sparked fury among creditors who had already taken a hefty haircut during the previous restructuring.

The current plan implies debt holders would have to write off more than half their investment, investors have said.

However the bank’s proposals got the go-ahead earlier this month when claimants holding a cumulative $10.2 billion of debt voted in favour of the deal.

The deal involved converting over $1 billion of debt into common shares while $9 billion in other claims were exchanged for $1.6 billion in cash and $750 million in new notes.

The new notes will have a semi-annual coupon of 5.5 percent per year and will mature in 2022.

Samruk Kazyna also provided a $1.6 billion loan to BTA.

The old 2018 bond is valued now at 42 cents on the dollar having risen from a low of 15 cents in August. (Reporting by Sujata Rao; Editing by Erica Billingham)

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