KZBlog

As part of its bailout project, the Kazakhstan government had planned to buy assets in commercial banks. After negotiations with Halyk Bank and Kazkommerstbank to take government money, attention has turned to BTA and Alliance Bank. Samruk-Kazyna, the newly formed holding that combines development holding Kazyna and Samruk holding, which owned the largest and most profitable national companies in Kazakhstan, will buy 78.14% of shares in BTA bank and pay 251 billion tenge ($2.1 billion), which many agree is a high price for the troubled bank. BTA recently paid back 250 million dollars worth of Eurobond debt but is rumored to owe more than 3 billion dollars to foreign creditors, more than any other bank in the country.

Interestingly, just Friday, BTA denied rumors that it would nationalize part of its assets, the Temir bank subsidiary. At the same time, they confirmed the original bailout deal, that the government would buy 25% of shares in BTA.

The chairman of the board of BTA and a former opposition leader, Mukhtar Abylazov, was ousted by the government today “because his ‘actions were found to be inconsistent with the interests of depositors and creditors and with current law,’ the government said on its Web site.” Abylazov has visited the government several times over the past month, but both he and the government have denied that the government was planning to buy a controlling share.

According to Renaissance Capital, the government may try to make a profit on the sale by selling the assets to Sberbank, a Russian bank with a presence in Kazakstan. German Gref, the head of Sberbank had meetings with Samruk-Kazyna and with Prime Minister Masimov a few weeks ago to discuss the financial crisis and possibly the sale of BTA banks assets.

Alliance Bank, which has been plagued by rumors that it would soon collapse, also vigorously denied recently that it would be bought out by the government, claiming that it would only sell 25% of its shares to the state and seek another investor. However it looks like the government may buy 76 percent of the Bank for 100 tenge ($0.83 ) total. Alliance is the nation’s fourth- largest bank and traded on the London Stock Exchange. The government will deposit $200 billion into the bank’s coffers.

According to the New York Times article on the subject, the acquisition of shares is only temporary:”‘This measure is not nationalization, it is temporary according to existing Kazakh legislation which stipulates that the government will eventually exit its shareholder base,’ the government statement said.”

In related news, Kazkommerts Bank will hold an extraordinary general meeting of shareholders next month to discuss the sale of 25% of its assets to the government. We will see if there are any surprises in there.