White & Case LLP - News - White & Case Advises on Landmark US$16.65 Billion BTA Bank Restructuring

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White & Case Advises on Landmark US$16.65 Billion BTA Bank Restructuring

London, Almaty, Moscow, New York, September 20, 2010 ... Global law firm White & Case LLP has advised Kazakhstan's BTA Bank JSC on the restructuring of its financial debt, following the global financial crisis which hit the banking sector around the world.

The restructuring, which reduced the "BTA Bank" JSC (the "Bank")'s debt from US$16.65 billion to US$4.24 billion, allowed the bank to emerge from the crisis as a going concern, without the need to rely on taxpayer state aid or the creation of a "bad" bank.

This complex transaction involved a range of creditor groups including Eurobond holders, distressed debt hedge funds, subordinated debt-holders both domestic and foreign, syndicated and bilateral lenders, government-backed lending bodies, and trade finance creditors, all of whom were represented in negotiations by a steering committee consisting of 12 institutions. The deal was the first in Eastern Europe to require two thirds of all creditors – not just two thirds present at a meeting – to vote in favour of the restructuring. At the final creditors' meeting, held on 28 May 2010, the restructuring plan won the approval of 92% of all creditors , far in excess of the 2/3 threshold, and only 1% of creditors voted against the restructuring.

As a result of the restructuring, the Bank's existing debt was restructured into a number of packages which consisted of a mixture of forms of consideration including cash, senior and junior notes, original issue discount notes, recovery units, shares and GDRs, as well as commitments under a new trade finance revolving facility.

The Restructuring received recognition in the courts of the USA, the UK and Ukraine. On 16 August 2010, a further permanent stay of proceedings preventing any creditors from bringing further proceedings against the Bank in the UK was granted by the High Court, the first time such an order had been granted in relation to the successful completion of foreign restructuring proceedings.

"This was a complex and challenging restructuring, but we were able to achieve a sound, and more importantly consensual, result both for BTA Bank and for its large number of creditors," said Francis Fitzherbert-Brockholes, who led the White & Case team advising BTA Bank. "The redrafting of Kazakhstan's restructuring laws, plus the successful restructuring of 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."

In 2009, the White & Case team advised the Kazakhstan Government to restructure its banking sector, assisting the country in drafting a new restructuring law which complies with the UNCITRAL Model Law on cross-border insolvency, which governs international recognition of insolvency laws, allowing the restructurings of the Bank and JSC Alliance Bank to be recognised by the UK and other international courts.

The Firm also advised on the successful US$4.5 billion debt restructuring of JSC Alliance Bank, which completed in March 2010.

White & Case LLP's team was led by Francis Fitzherbert-Brockholes, assisted by London partners David Barwise, Mark Glengarry and Gavin McLean (all Banking & Capital Markets); partner John Higham QC (Dispute Resolution), with counsel Andrew O'Keeffe (Trade Finance), and partner Laura Sizemore based in Istanbul (Banking & Capital Markets). A team of associates and trainees worked on the transaction led by associates Michael Bark-Jones, Tomas Cerdan and Joseph Gross, and including associates Esther Burdett, Gordon Charlton, Eadaoin Conway, Paul De Gruchy, Joseph Gross, John Munnis, Kshiti Vora and Ingrid York; and trainees Clementine Jepson-Turner and Xiaoyan Sun. The Almaty-based team included local partner Michael Rayson; Counsel Kairat Baizakov; with associates Vilen Adjivefayev, Avaskhan Asanaliyev, Pavel Kornilov, and Askar Zhansagimov. The New York team included partners Evan Hollander Abraham Zylberberg; associate Richard Graham; and legal assistant Rashida Adams. The Moscow team included counsel Alexey Barnashov; with associates Pavel Boulatov, Elizaveta Ivanova, Varvara Kudlai, Dmitry Lapshin and Daria Vasilieva.

White & Case's Kazakhstan team was led by Yuriy Maltsev, who was the Firm's Almaty office executive partner until he passed away unexpectedly in May 2010. The Firm would like to acknowledge Yuriy's contribution to the team; his command of local laws and his deep professional knowledge were major factors in the enabling the successful restructuring of BTA Bank.

About White & Case
White & Case LLP is a leading global law firm with lawyers in 36 offices in 25 countries. Among the first US-based law firms to establish a truly global presence, we provide counsel and representation in virtually every area of law that affects cross-border business. Our clients value both the breadth of our global network and depth of our US, English and local law capabilities in each of our regions and rely on us for their complex cross-border transactions, arbitration and litigation provided by our global practices.

Contact:
Charlotte McCubbin
Media Relations Executive
White & Case LLP
+ 44 20 7532 2852

	Press Releases
Expertise Capital Markets Lawyers Francis Fitzherbert-Brockholes Vilen Adjivefayev Kairat E. Baizakov Michael Bark-Jones David Barwise Gordon Charlton Éadaoin Moran Joseph D. Gross John Higham QC Pavel Kornilov Gavin McLean John Munnis Laura Sizemore Ingrid York Askar B. Zhansagimov Locations London	White & Case Advises on Landmark US$16.65 Billion BTA Bank Restructuring London, Almaty, Moscow, New York, September 20, 2010 ... Global law firm White & Case LLP has advised Kazakhstan's BTA Bank JSC on the restructuring of its financial debt, following the global financial crisis which hit the banking sector around the world. The restructuring, which reduced the "BTA Bank" JSC (the "Bank")'s debt from US$16.65 billion to US$4.24 billion, allowed the bank to emerge from the crisis as a going concern, without the need to rely on taxpayer state aid or the creation of a "bad" bank. This complex transaction involved a range of creditor groups including Eurobond holders, distressed debt hedge funds, subordinated debt-holders both domestic and foreign, syndicated and bilateral lenders, government-backed lending bodies, and trade finance creditors, all of whom were represented in negotiations by a steering committee consisting of 12 institutions. The deal was the first in Eastern Europe to require two thirds of all creditors – not just two thirds present at a meeting – to vote in favour of the restructuring. At the final creditors' meeting, held on 28 May 2010, the restructuring plan won the approval of 92% of all creditors , far in excess of the 2/3 threshold, and only 1% of creditors voted against the restructuring. As a result of the restructuring, the Bank's existing debt was restructured into a number of packages which consisted of a mixture of forms of consideration including cash, senior and junior notes, original issue discount notes, recovery units, shares and GDRs, as well as commitments under a new trade finance revolving facility. The Restructuring received recognition in the courts of the USA, the UK and Ukraine. On 16 August 2010, a further permanent stay of proceedings preventing any creditors from bringing further proceedings against the Bank in the UK was granted by the High Court, the first time such an order had been granted in relation to the successful completion of foreign restructuring proceedings. "This was a complex and challenging restructuring, but we were able to achieve a sound, and more importantly consensual, result both for BTA Bank and for its large number of creditors," said Francis Fitzherbert-Brockholes, who led the White & Case team advising BTA Bank. "The redrafting of Kazakhstan's restructuring laws, plus the successful restructuring of 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." In 2009, the White & Case team advised the Kazakhstan Government to restructure its banking sector, assisting the country in drafting a new restructuring law which complies with the UNCITRAL Model Law on cross-border insolvency, which governs international recognition of insolvency laws, allowing the restructurings of the Bank and JSC Alliance Bank to be recognised by the UK and other international courts. The Firm also advised on the successful US$4.5 billion debt restructuring of JSC Alliance Bank, which completed in March 2010. White & Case LLP's team was led by Francis Fitzherbert-Brockholes, assisted by London partners David Barwise, Mark Glengarry and Gavin McLean (all Banking & Capital Markets); partner John Higham QC (Dispute Resolution), with counsel Andrew O'Keeffe (Trade Finance), and partner Laura Sizemore based in Istanbul (Banking & Capital Markets). A team of associates and trainees worked on the transaction led by associates Michael Bark-Jones, Tomas Cerdan and Joseph Gross, and including associates Esther Burdett, Gordon Charlton, Eadaoin Conway, Paul De Gruchy, Joseph Gross, John Munnis, Kshiti Vora and Ingrid York; and trainees Clementine Jepson-Turner and Xiaoyan Sun. The Almaty-based team included local partner Michael Rayson; Counsel Kairat Baizakov; with associates Vilen Adjivefayev, Avaskhan Asanaliyev, Pavel Kornilov, and Askar Zhansagimov. The New York team included partners Evan Hollander Abraham Zylberberg; associate Richard Graham; and legal assistant Rashida Adams. The Moscow team included counsel Alexey Barnashov; with associates Pavel Boulatov, Elizaveta Ivanova, Varvara Kudlai, Dmitry Lapshin and Daria Vasilieva. White & Case's Kazakhstan team was led by Yuriy Maltsev, who was the Firm's Almaty office executive partner until he passed away unexpectedly in May 2010. The Firm would like to acknowledge Yuriy's contribution to the team; his command of local laws and his deep professional knowledge were major factors in the enabling the successful restructuring of BTA Bank. About White & Case White & Case LLP is a leading global law firm with lawyers in 36 offices in 25 countries. Among the first US-based law firms to establish a truly global presence, we provide counsel and representation in virtually every area of law that affects cross-border business. Our clients value both the breadth of our global network and depth of our US, English and local law capabilities in each of our regions and rely on us for their complex cross-border transactions, arbitration and litigation provided by our global practices. Contact: Charlotte McCubbin Media Relations Executive White & Case LLP + 44 20 7532 2852