Centras Securities announces completing settlement of loan terms between Kazakhstan Kagazy and Alliance Bank

/KASE, October 10, 14/ – Centras Securities JSC (Almaty), a representative of holders of bonds KZP01Y20C023 (KZ2C00000263, KKAGb2), KZP02Y22C027 (KZ2C00000271, KKAGb3) and KZ2C0Y20D116 (KZ2C00000255, KKAGb4) of Kazakhstan Kagazy JSC (Almaty region), listed on Kazakhstan Stock Exchange (KASE), has by an official letter informed KASE of the following: quote Kazakhstan Kagazy PLC (KK) and Alliance Bank JSC (Alliance) are pleased to announce that they have agreed terms upon which KK Group's outstanding loan indebtedness to Alliance Bank (totalling about KZT15.3bn, including interest and penalties) will be fully and finally settled. Under the terms of the signed settlement agreements, KK will transfer its selected non-core assets, including land plots and Class B warehouses to Alliance. As a result, KK will exit the logistics business. In addition, KK will pay between 2.7bn and 5.4bn KZT to Alliance, depending on the outcome of KK's proceedings in London against the company's former shareholders. In its turn, Centras Securities (hereinafter – the Representative) using its authorities as a representative of bondholders has sent an enquiry to the issuer to obtain more detailed information on terms of the amicable settlement related to liabilities of the Issuer on execution of restrictions and covenants indicated in the Bond Issue Prospectuses and Restructuring Agreements. As yet, the Representative has not received any reply to the enquiry from the Issuer. Accordingly, more detailed information will be provided to bondholders as soon as it is received. The Representative of bondholders thinks that exit of Kazakhstan Kagazy from the logistics segment by way of transfer of its selected non-core assets, including land plots and Class B warehouses to Alliance Bank is likely to negatively affect the operational profitability and liquidity indicators as a result of reduced generated revenues. In this respect the Representative expresses his concerns with regard to the Issuer's ability to meet his obligations on payment of issued bonds in future. unquote [2014-10-10]