Kazak bank asks for more credit support

ISTANBUL

This photos shows Kazakhstan’s third largest banki BTA’s Astana headquarters. The lender partly owned by Turkey’s Şekerbank is seeking a second debt reconstruction.

BTA, Kazakhstan’s third-biggest bank by assets, has asked creditors to back a second debt restructuring after saying it may not have enough cash for its next interest payment, according to Reuters.

The situation interests Turkey too, as Turkish lender Şekerbank is nearly 34-percent owned by BTA Securities JSC.

BTA Chairman Anvar Saidenov said in an open letter published on Tuesday on BTA’s website that the bank needed to take urgent action to avoid bankruptcy. He did not give details about the interest payment. BTA said on Dec. 22 its next coupon payment of around $150 million was due by Jan. 3.
“The board is unanimously of the view that a further restructuring of the bank’s balance sheet is in the best interests of all of the bank’s creditors, shareholders and GDR holders,” Reuters quoted Saidenov as saying in the Dec. 23 letter. “If nothing is done to address this situation, the bank is likely to be placed into conservation or to commence bankruptcy proceedings under Kazakhstan law.”
BTA was the largest of Kazakhstan’s banks to default in 2009 when the financial crisis hit central Asia’s largest economy, laying bare the banking sector’s exposure to bloated real estate markets and an excessive reliance on external funding.

Net debt cut to $4.2 billion
 
The bank managed to cut net debt by about two thirds to $4.2 billion through a program agreed upon with creditors last year, which installed sovereign wealth fund Samruk-Kazyna as its 81.5-percent shareholder.

BTA owns 33.98 percent of Şekerbank, while the same amount of shares is owned by Şekerbank’s employees through a foundation. Nearly 32 percent of the lender is publicly-traded. Şekerbank has 272 branches in Turkey, employing around 3,500 people.