Balapanov said that along with restructuring, Samruk-Kazyna converts bank deposits into cash, raises the coupon rate on its own bonds, a BTA asset, and extends interest-bearing loan of $1.592 billion. He noted that the capital increase has not occurred yet, but the share of the state fund in the bank “will increase significantly”. Currently Samruk-Kazyna owns an 81.48%-stake in the bank.

The Bank will receive considerable debt relief from its creditors holding Senior Notes, Recovery Units and Original Issue Discount Notes and various classes of subordinated debt. Creditors will exchange their interests for a package of New Notes and cash. The New Notes will have a nominal amount of $750 million with a semi-annual coupon of 5.5% p.a. and a bullet maturity in 2022. In exchange for their notes, Senior Noteholders will receive $957.8 million of cash and $88.8 million of New Notes, Recovery Unit holders will receive $660.2 million of cash and $61.2 million of New Notes and Original Issue Discount Noteholders will receive $600 million of New Notes. The amount and form of restructuring consideration (if any) to be delivered or paid with respect to any series of the Subordinated Notes shall be determined by the Bank but shall not alter or reduce any entitlements deliverable to other creditors.

The Bank has also agreed with its Revolving Committed Trade Finance Facility (RCTFF) lenders on terms for the RCTFF. These terms provide for an extension of the maturity of the $348.2 million facility until 31 December 2015. Additionally, the RCTFF lenders have agreed to modify the eligibility criteria to facilitate increased utilisation of the RCTFF. This will enable BTA to finance new and profitable lending in accordance with its business plan. A summary of the new terms for the RCTFF is included in the letter posted on the Bank’s website.

The controlling shareholder, Samruk-Kazyna, will support the transaction through a combination of the conversion of deposits into equity resulting in an increase in its shareholding in the Bank, an increase in the coupon on its bonds held as an asset by the Bank and through a $1.592 billion interest-bearing loan subordinated to the New Notes.

Yerik Balapanov, Chief Executive Officer of the Bank, said: “We are very pleased with the outcome of the negotiations with the Steering Committee. We agreed the restructuring terms as a result of negotiations carried out under internationally recognised standards of best practice. We believe that this restructuring will provide the Bank with a sound and stabilised balanced financial structure going forward. We hope to complete the restructuring by year end 2012.”

Joseph Swanson, Co-Head of Financial Restructuring Europe, Houlihan Lokey – financial advisor to the Steering Committee stated: “All the signatories are pleased to have reached agreement on the basic terms of the restructuring. They are also pleased that the Bank has reached agreement with the RCTFF lenders on the terms of an extension that will facilitate new trade finance availability for the Bank, as well as the broader banking sector in Kazakhstan. We remain committed to working with the Bank and its advisers to achieve a successful conclusion to the restructuring of BTA’s indebtedness.”

During the course of negotiations and as part of their due diligence, the Bank has shared certain financial information as to its historical results and projected business plans with the Steering Committee and its advisers. This information shows that based on the Bank’s business plan and financial model, the restoration of the Bank’s Tier 1 capital ratio above 10% under Basel II will be achieved post-restructuring and should be maintained through 2016, although profitability will be restored after 2014.

The Bank was advised by Lazard Frères and White & Case LLP, as financial and legal advisors respectively. The Steering Committee was advised by Houlihan Lokey and Baker & McKenzie, as financial and legal advisors respectively.

In late 2011 BTA Bank announced its plans to restructure certain parts of its financial debt. The proposed restructuring will relate to the bank’s liabilities to its creditors under outstanding obligations entered into during the restructuring completed in 2010.The restructuring proceedings were recognized in the United States and United Kingdom.

The Specialized Financial Court of Almaty extended the deadline by which the Bank’s restructuring proceedings until 20 December 2012.

In September of 2010 BTA Bank completed debt restructuring, as a result of which the bank’s debts reduced from $16.65 billion to $4.2 billion. After the restructuring National Welfare Fund Samruk-Kazyna became the major shareholder of BTA Bank (81.48%). The creditors that were not affected by the restructuring hold over 18%.