Goldman Sachs quits as advisor to BTA Bank

business and economy

Goldman Sachs quits as advisor to BTA Bank

By SRI ⋅ July 1, 2009 ⋅

(SRI) - Goldman Sachs resigned as a restructuring advisor to BTA Bank, Bloomberg reported on Wednesday. This will likely lead to further slowdown of the restructuring of the bank’s $15 billion of debt on which it defaulted in April.

BTA reportedly received a letter of resignation from Goldman Sachs after the two financial institutions failed to agree on amendments to their existing contract, Bloomberg said quoting BTA Chairman Arman Dunayev.

BTA hired Goldman Sachs to advise it on potential restructuing of its large foreign debt soon after the government took control of the bank in February. Later, the Kazakh lender also hired Swiss UBS AG to assist in the restructuring plan. BTA defaulted on its debt in April, reportedly after two creditors demanded accelerated repayments of their debt. At that time, BTA said, in order to treat its creditors equally, it would stop all principle repayments until it negotiates “a reasonable, transparent and efficient program for managing its current debt position.” So far, BTA has not released the restructuring terms but according to Anvar Saidenov, the bank’s CEO, creditors could be offered a variety of options, including a potential cash component or extension of maturity.

“The change of adviser midway through the process would not be constructive,” Bloomberg quoted Milena Ivanova-Venturini, director of Equity Research Banking & Finance at Renaissance Capital in Almaty. “A further slowdown in a debt restructuring process that is already viewed by investors as extremely slow and not particularly transparent will add further negativism to the image of Kazakhstan as a reliable counterparty.”

It is unclear who would replace Goldman Sachs, although one possibility is Lazard Freres which oversees the debt restructuring of Alliance Bank, another Kazakh lender that has defaulted on its liabilities.