Business as usual at BTA, bank says

business and economy

By SRI ⋅ June 30, 2009 ⋅

(SRI) - BTA Bank is operating in normal fashion and is providing an adequate level of liquidity, the bank said in a statement on Friday.

“The negative capital shown on the financial statements for the five months is just the acknowledgment of the losses resulting from the loans given by the previous management team to its affiliated companies, including the loans for financing projects outside Kazakhstan,” the statement said.

BTA is reportedly working to get recover the loans, often issued to murky offshore entities, and restructure its own debt.

“The bank continues working normally [and] renders services to its clients as usual. At the same time, the bank and its financial and legal advisors are devising a plan for restructuring its external debts, developing a new financial model and a development strategy,” BTA’s statement said.

BTA reported an estimated loss of KZT1.188 trillion ($7.9 billion) in 2008, resulting in negative shareholder equity of KZT743 billion ($4.9 billion).

BTA defaulted on its foreign debt in April. It has ceased making principal payments on all of its debt in attempts to treat all creditors equally while developing a restructuring plan that would be agreeable to all of its creditors.