Approximately US$16.7bn worth of debt from BTA Bank, formerly the largest bank in Kazakhstan, was restructured through different packages offered to creditors, resulting in the debt burden of BTA Bank being reduced to US$4.2bn. 

The restructuring was highly significant as it was achieved without the need for a full government bailout or the creation of a “bad bank” – highly unusual in a restructure of this magnitude, according to both firms. This deal was also significant in terms of its volume and complexity. 

“We experienced quite a unique situation whereby the creditors’ steering committee was comprised of more than one class of creditors. Although at times there were conflicts amongst the interests of commercial lenders as against those of bondholders as against those of export credit agencies as against those of trade finance lenders, by having all classes of creditors at the same negotiating table, the creditors were able with greater transparency to structure a very balanced, diversed and reasonable restructuring package within a very tight timeline,” Baker & McKenzie head of European banking & finance Michael Foundethakis said.

White & Case lead partner Francis Fitzherbert-Brockholes said: “The redrafting of Kazahkstan’s restructuring laws, plus the successful restructuring og the Alliance Bank and BTA Bank, is a real triumph for Kazakhstan, showing other countries in the region how they can ensure certainty and stability in their banking sectors in the wake of the financial crisis.”

 White & Case also advised the Kazakhstan government on the restructure of its banking sector in 2009, including drafting a new restructuring law which complies with the UNCITRAL Model Law on cross-border insolvency. This allowed the restructurings of BTA Bank and JS Alliance Bank to be recognised by the UK and other international courts.

Both White & Case and Baker & McKenzie had lawyers in multiple jurisdictions including Almaty, Moscow, New York and London and Munich working on this deal.ALB

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