Kazakhstan Kagazy reports its debt restructuring

/KASE, November 17, 10/ - Kazakhstan Kagazy (Almaty region), whose securities are officially listed on Kazakhstan Stock Exchange (KASE), provided to KASE the following press release of November 15, 2010: quote Kazakhstan Kagazy plc (the "Group"/the "Company") has pleasure in announcing that it has restructured its loan from Alliance Bank ("Alliance") (USD29.3 million) and that Alliance has refinanced the loan from Eurasian Bank ("Eurasian") (USD5.5 million) which matured in August 2010. This is a significant step in the restructuring of the Group's debt. Highlights: - Bank loans of USD 34.8 million (KZT5.1 billion) restructured/refinanced - Interest rate reduced - Maturity extended - Interest and repayment holiday - Loan re-denominated in KZT, eliminating exchange rate risk - Discussions with other lenders constructive and ongoing Following a long period of negotiations, the Company has reached agreement with Alliance to a) restructure its loan and (b) to refinance the Group's Eurasian loan. Alliance Bank has agreed to reduce the interest rate, to suspend interest and principal for a period (subject to the agreement to refinance in 2011 half of the Eurasian Loan), to re-dominate the loan in KZT and to waive all fines and penalties. The Group remains in constructive discussion with (the Development Bank of Kazakhstan and the European Bank for Reconstruction and Development, its other bank lenders. The Group has agreed restructuring terms with bondholders representing 12% of its outstanding bonds, and remains in constructive discussion with the remainder. The Group looks forward to being able to make further announcements in this matter in due course. The board of the Company notes that if agreement is not reached with its other lenders and with its bond holders or if discussions with the Group's lenders do not result in a satisfactory outcome, the ongoing prospects of the Group will be uncertain. David Facey, Partner, SP Angel Corporate Finance LLP, financial advisers to the Group commented: "This is a significant step forward for the Group. The terms of the new Alliance loan represent a significant improvement over the terms of the previous Alliance and Eurasian Loans and will act as a cornerstone upon which to create a solid financial base for the future of the Group. The Group continues to make solid improvement in its operating results as the economy improves and as the Group's restructuring measures take effect. We appreciate the professional contribution of Alliance and Eurasian, as well as the ongoing efforts of all our lenders in assisting the Group's return to a sound financial footing." Tomas Mateos Werner, Chairman stated: "We are delighted with terms of our new Alliance loan. I believe it is a first and big step on our ladder to recovery. I look forward to announcing further refinancing terms as and when they are agreed". unquote [2010-11-17]