Temirbank (Kazakhstan): Almaty special financial court approves the bank's restructure plan

/KASE, November 23, 09/ - A BTA Bank's subsidiary -Temirbank (Almaty), a company listed on the Kazakhstan Stock Exchange (KASE), provided KASE with a press release dated November 23, 2009: Quotation begins OVERVIEW Temirbank was approved by Kazakhstan Financial Regulation Agency (the Agency) and Almaty Special Financial Court on plans to restructure the bank's debt. The plan will involve restructuring of guarantees on international and domestic bonds, certain transactions related to trade financing, and liabilities before affiliated persons of the bank. All retail and commercial deposits (save certain deposits of affiliated companies) and other operational liabilities of the bank, including adviser fees, will be excluded from the restructure plan. Deposit transactions will be processed in normal mode and there will be no discounts applied thereto. Individual depositors are still covered with the state deposit guarantee program. According to the current legislation, individual banking deposits placed in the bank and other STBs are guaranteed for up to KZT5 m. On a condition of successful restructuring, National wellbeing fund Samruk- Kazyna will pump more money into the bank, thus, becoming a major shareholder. MORE INFORMATION Reports of the Agency (available at the Agency website www.afn.kz) say the bank failed to comply with capital and liquidity requirements, specified in the Instruction on norms and methods of calculation of prudential norms for STBs, approved by Resolution No. 358 of the Agency dated September 30, 2005 ("the Instruction"). With a deteriorating loan portfolio and the capital of the bank, as said in the report on norms for October 2009, the Agency might deny the bank of a banking license, however, chose not to do so, provided, the bank takes steps to ensure capitalization indicators and boost standings of the bank before the year end. The agreement is limiting operations of the bank, including a ban to advertise deposits (except for the current deposits), before the end of restructuring. The Agency denied the bank License No. 0407100254 for custody activities. Citigroup Global Markets Limited was appointed to advise on liabilities and assist the bank in the restructuring and recapitalization. Worsening financial standings of the bank did not let the bank pay KZT5.8 bn due November 6, 2009 (interest and the principal), and KZT1.9 bn due November 9, 2009 to its main shareholder BTA Bank on deposit agreements. This also means Temir Capital B.V. will not pay (i) USD23.6 m interest due November 23, 2009 on senior bonds, issued within its Global Mid-Term Bond Program for a total of USD1,200,000,000 and (ii) USD12.6 m interest due November 24, 2009 on senior bonds with 9 % interest for a total of USD300,000,000 maturing in 2011. Beginning today no interest neither principal payment shall be made in regard of the restructuring debt. Interest to be accrued will be included into the restructuring. Temirbank will release more information as available. The approval of the restructure plan by the Almaty Special Financial Court affected, a moratorium, suspending any requirements to the bank and banning appeals to the bank property. No claimed sums acquired as on or after the date of the press release, may be accrued to any sum, payable by a creditor in favor of the bank. Ends [2009-11-23]