Central bank officials to meet Alliance Bank’s creditors

business and economy

Central bank officials to meet Alliance Bank’s creditors

By SRI ⋅ June 15, 2009 ⋅

(SRI) - Creditors of Alliance Bank, which defaulted on its foreign debt in April, will meet with officials of the National Bank of Kazakhstan this week to discuss the ongoing restructuring talks, the central bank’s chairman Grigoryi Marchenko said on Friday.

Alliance’s creditors and the creditors of BTA Bank, Kazakhstan’s largest bank which also defaulted on its debt, have formed committees to negotiate the restructuring terms with the two banks and with Kazakh authorities which have effectively taken over both institutions in February. According to Marchenko, National Bank’s officials will meet with Alliance’s creditors for the first time this week in Almaty.

Alliance Bank unveiled the proposed terms to restructure its foreign obligations in a conference call in May and set July 15 as the final date to reach an agreement with its foreign creditors.

“If by July 15 Alliance bank has not reached a satisfactory agreement (with creditors), the Financial Supervision Agency (FSA) will move Alliance into conservation,” the bank’s CEO Maksat Kabashev said last month, referring to a regulatory regime that may be followed by bankruptcy.

Under the proposed restructuring terms, Alliance would offer creditors a buyback at 20 percent of face value, limited to $500 million; a seven-year rollover with a 50 percent discount; or a 15-year rollover at par.