Int’l Bank of Azerbaijan seeks US court protection
Baku, Azerbaijan, May 13
By Leman Zeynalova – Trend:
The International Bank of Azerbaijan (IBA) has filed an appeal to the New York court to aid the restructuring of $3.34 billion in debt, The Wall Street Journal reported.
Hurt by a steep decline in oil prices and subsequent currency fluctuations, the Azerbaijani bank sought protection, according to The Wall Street Journal.
If approved by a judge, the bank would receive the benefits of US law, including protections that halt lawsuits and otherwise prevent interference from creditors.
It was earlier reported that the IBA commenced a process of voluntary restructuring within the framework of its financial improvement.
The restructuring plan contemplates a restructuring process to be effected through an exchange of IBA’s senior and junior foreign currency obligations for direct sovereign obligations of Azerbaijan.
The process will lead to a meeting of all creditors affected by the restructuring plan. If approved by two-thirds of the affected creditors by value the plan will be accepted and become binding on all of them.
Pending the implementation of the planned restructuring process, and to ensure equal treatment of all affected creditors, IBA has suspended payments of principal and interest with respect to all obligations to be included in the operation (other than interest under trade finance facilities).
Depositors in IBA will not be impacted by the proposed restructuring, and that the Bank’s normal services and operations will continue to be conducted during the forthcoming process.
“The Ministry of Finance has noted with concern the deteriorating financial and capital position of International Bank of Azerbaijan,” Samir Sharifov, Azerbaijan’s minister of finance, said in a statement, The Wall Street Journal reported. “Re-establishing the financial viability of IBA is critical so that the bank can continue to provide important banking services to the Azerbaijan economy.”
Azerbaijan’s Ministry of Finance is supportive of the efforts of IBA to restore its financial viability, the minister added.