The country has delivered an ultimatum to the IBA creditors and believes there are not any state guarantees for it.
Creditors who are offered to exchange bonds with a 20-percent discount from face value within the framework of the restructuring of the debt of the largest bank of Azerbaijan received a warning that the organization can be closed if they oppose the plan, and the Ministry of Finance of the republic stated that the bank has never received a full sovereign guarantee.
The International Bank of Azerbaijan offers to exchange its foreign debt of $ 3.37 billion for new government bonds and bonds of the organization itself, which h follows from the presentation to investors that was held in London on May 23, reports Bloomberg.
The proposed plan will become mandatory if it is approved by creditors, which account for two-thirds of the debt in monetary terms. Azerbaijan wants to complete the restructuring on August 24.
“Lenders are very unhappy with writing off part of the debt,” said Lutz Remeier, asset manager for approximately $ 2.2 billion, including IBA bonds, at Landesbank Berlin Investment, planning to vote against the plan. – This proposal demonstrates the unwillingness of the state to pay, with all the possibilities to pay. This will lead to an increase in the cost of long-term financing for Azerbaijan.”
Dollar bonds of IBA for $ 500 million with maturity in 2019 fell to 82.24 cents per dollar, or more than 18 cents from May 11, on the eve of announcement of the restructuring plan. During the presentation on Tuesday, the papers fell by about 1 cent, Forbes notes.
According to the edition, within the framework of internal reorganization the bank, in particular, plans to get rid of the units in Russia and Georgia.
* In IBA 40% of all banking assets of Azerbaijan are concentrated. Almost all oil and service companies operating in the country have accounts in this bank. In 2016, the IBA allocated a credit line for the State Oil Company of Azerbaijan for 1.86 billion manats. Of this amount, 1.26 billion manats was to be used to finance the modernization of the Heydar Aliyev refinery, and 600 million manats – for drilling operations at the fields of SOCAR – Guneshli and Bulla-Deniz. The amounts are allocated in tranches, depending on the implementation of the project stages.
