Samruk-Kazyna Board Chairman Kairat KELIMBETOV:
WE DON'T WANT TO SELL THE BANKS AT ANY COST BUT WITH CONSIDERATION OF INVESTMENT MADE BY THE GOVERNMENT AND THEIR ACTUAL VALUE
Having resolved debt problems of the 3 backbone banks of Kazakhstan, many are wondering when the Government plans to withdraw from the banks' capitals. The Head of Samruk-Kazyna Fund, Kairat Kelimbetov, has kindly agreed to expand on this issue and answer several other questions in an interview with Interfax-Kazakhstan.
- Mr Kelimbetov, how does the fund approach the withdrawal from Halyk Bank's capital?
- When we entered the capital in 2009, we could only advance 120 billion tenge for Halyk Bank and 120 billion tenge for Kazkommertsbank. Half of the investment into Halyk Bank (60 billion) was allocated for equity and 60 billion - for the deposit. They have paid off the deposit. As to the second sum, it is expected that the shareholders will be eligible to buy out there shares after the first quarter of 2011. I believe that Halyk Bank will be able to do so in the second quarter, if it doesn't overturn its decision. Kazkommertsbank has returned part of the deposit (46.5 billion tenge) last December. It is solely up to the shareholders when to proceed with the withdrawal. But I think they will have such an opportunity after the second quarter.
As to other 3 banks - BTA, Alliance bank and Temirbank, we reaffirm our initial stance that the government should be a shareholder in second-tier banks only for a limited amount of time. Thus we intend to sell these banks as soon as possible. However there are a few sensitive issues: we don't want to sell them at any price, but with consideration of investment made by the Government and their actual value. As you can remember, BTA Bank, Alliance Bank and Temirbank received quite a substantial investment. First, it was a recapitalization program, when we invested 212 billion tenge in BTA, and placed 24 billion tenge on the Alliance Bank deposit. In addition, we gave said banks an opportunity to take part in the anti-crisis program for the support of SMEs and construction sector.
Speaking about BTA Bank's market value, relevant investment banks will do due diligence and negotiate the price after we have received audited financial statements we are waiting on at the moment. Thus, whoever believes that we are trying to sell the bank at a lower price is wrong. We have already said that we would sell the bank in 3-5 years. However if someone approaches us now offering a reasonable price, we are ready to sell the bank. But we expect that the larger bank will take longer to sell than the medium and smaller banks. Basically this is our general approach, we have arranged these proposals and will submit them for the Government's consideration in the near future.
Have you made any progress in talks with Russia's Sberbank, have you reached any agreement on the sale of shares in BTA Bank? When do you expect to receive a definite answer from Sberbank?
As I have mentioned, we are currently waiting for audited financial statements on BTA Bank. Sberbank's work group is currently studying the information memorandum, signed with the creditors: the restructuring results, and what obligations they impose on the bank's shareholders. So we are currently engaged into a working dialogue.
There are two factors here. First, most of the assets to be returned are in Russia now and that is why we need a partner with strong financial and administrative capabilities. In my opinion, the ideal partner would be Sberbank. Together with this bank we could finalize financing very many projects, finish the construction and get the assets returned. Second, we are rapidly approaching the Common Economic Space and, thus, the competitiveness issues now have to be tackled based on the principles that Kazakh companies will be operating in the Russian economic conditions, Russian and Belarus companies in the Kazakh economic conditions. Such competition would have a positive impact on Kazakhstan's residents: the prices will be more competitive and, consequently, the whole population will benefit from it.
In this connection I do not quite understand the efforts to prevent Sberbank from coming here. Some people have forgotten that the bank has a subsidiary now operating in Kazakhstan and can buy any other bank here, maybe a different one that is less burdensome than BTA and expand its market share. I believe that if we do not sell BTA to Sberbank, sooner or later we will sell it to another bank because the government is definitely going to sell its stake in the bank.
While the state-owned Samruk-Kazyna is a shareholder in these banks, we will be trying to enhance their competitiveness, increase their capital, market value and expand their presence in the banking sector of Kazakhstan. With the help of these banks we are going to boost lending, while the Development Bank of Kazakhstan and National Fund Damu will be playing a leading role in this process.
- Are there any plans to sell Alliance Bank and Temirbank in the near future?
- Alliance Bank and Temirbank have attracted great interest, though no specific proposals have been made by investors yet. It is too early to provide any details and I can only say that they are foreign banks.
I would like to remind that the three banks can only be sold of the terms and conditions of the memoranda signed by the creditors are met. In other words, the prospective buyers should be banks that have investment ratings and the required level of authorized capital. If we want to sell the banks to investors that do not comply with the requirements, then the creditors will be able to demand that the debts should be repaid prematurely. But this is a large amount and I do not think we should do it.
I would like to note that these will be deals with very rigid terms and conditions because the government has improved the situation in the banks, which are now steadily developing, and that is why we do not have to sell them with any adjustments in the price.
- What is the current financial status of Astana-Finance, in which Samruk-Kazyna is also a shareholder?
- Samruk-Kazyna owns a 5% stake in this company, the rest of the state-owned holding is owned by the Finance Ministry. Astana-Finance was in a critical situation and now the company managers, who have nothing to do with Samruk-Kazyna, are in talks about debt restructuring.
In my opinion, everything will depend on the creditors and the company managers that need to reach agreement. We are ready to assist in the deal, including financial support. It is expected that Samruk-Kazyna will provide a first-priority loan to Astana-Finance. We are ready to consider this possibility provided that the following two requirements are met: first, there should be a clearly specified plan as to how Samruk-Kazyna will get back the monies given the terms and conditions offered by the managers of Astana-Finance and, second, all the parties concerned should be happy with the proposed terms and conditions.
I believe that we don't have many options: it is either restructuring or bankruptcy. The situation with BTA, Alliance Bank and Temirbank involved a great number of clients and affected many people, while this case has less significance for Kazakhstan's financial sector. However, I still would like to see the parties to come to a consensus.
- What policy the government and the Samruk-Kazyna fund will be pursuing in the mining sector? Last year the fund mentioned a possibility of raising a state share in ENRC, which has never been officially confirmed or refuted.
- In an interview with your colleagues from KazTAG, on October 7 last year, I said that we were not holding any negotiations, other than with Kazakhmys.
We believe that Kazakhmys' transaction was a very lucrative deal, as copper prices soared and we got our benefits. I think it's quite logical to use the money from the National Fund to invest in a company, of which financial standing we are well infomred. That applies to Kazakhmys. As for ENRC, I have not heard of any plans to change the current status quo.
- Tau-Ken Samruk national company was said to hold talks with Vale and Rio Tinto to conduct joint exploration of a multimetal mine in Karaganda region. Can you name any joint projects in the mining industry that may be launched in the near future?
- The negotiations are still on and it's premature to talk about any results. I think we have a good chance to reach certain agreements with Rio Tinto this year.
We have such major market players such as ENRC, Kazakhmys, KazZinc, they have already earned reputation on the market and some of them have been admitted to the listings on the London Stock Exchange. However, there are some niches that Tau-Ken Samruk may seize ether on its own or as a part other of a joint venture with other major mining companies. This is exactly what we are working on. The company has been operating for no more than a year or two. Now it is trying to stand on its own feet. It is still studying the market and we can't expect a big progress yet.
- Could you reveal the details of the projected floatation of state companies' shares on the stock market?
- We are preparing a package of proposals for the Economic Policy Council in early February. All this time we have been resorting to debt financing, but sooner or later there comes a time when the company becomes loaned up and its equity is not enough to borrow new funds. There are two options: either the state capitalizes this national company (but I see no available budget resources for that), or raising additional equity capital through an IPO. But I have already said that it is most unlikely that such need will arise in 2011-2012.
Besides, holding IPO for such companies as KMG, KEGOC, KTZ involves the need to amend the legislation, since they are regulated by the antitrust law. The international practice shows that it takes at least two years to prepare an IPO from announcing the plans till the actual offering.
- Thank you for this interview!
January, 2011
й 2011 Interfax-Kazakhstan news agency
References are obligatory
January, 2011
© 2024 Interfax-Kazakhstan news agency
Copying and use of these materials without reference to the source is prohibited
Archive
