Discussions on International Bank of Azerbaijan in London

Baku / 24.05.17 / Turan: "The process of restructuring the obligations of the International Bank of Azerbaijan (IBA) to foreign countries will cover three areas. These areas are related to non-guaranteed debts of a commercial nature, non-guaranteed debts of pre-emptive rights and subordinated loans.

This is stated in the information of the IBA press service about the meeting of representatives of this bank with foreign creditors on the issue of voluntary restructuring of foreign debts held in London on May 23.

The meeting was attended by Finance Minister Samir Sharifov, Chairman of the Board of Directors of the Financial Market Supervision Authority (FIMSA) Rufat Aslanli, and Chairman of the Board of IBA Khalid Ahadov. At the meeting, a plan for the restructuring of foreign debts was presented.

It was noted that the total amount of debts of the IBA is $ 3.3 billion. Information was also provided on the decree of the Azerbaijani President on the preparation of state-owned shares of the IBA for privatization, as well as on measures taken in connection with the decree.

It was noted at the meeting that due to the criminal actions of several persons represented in the bank's management, as well as due to the devaluation of the manat in relation to foreign currency, the bank's financial position was weakened. For this reason, voluntary restructuring became necessary.

"Before the transfer of debts to the state is completed, the fulfillment of foreign currency obligations to foreign creditors is suspended. All other liabilities of the bank, including operations on manat and dollar deposits of Azerbaijani citizens, legal entities and other non-residents will be continued in the current regime. This concerns protected and unprotected, demand (current) and time deposits," the meeting noted.

Minister of Finance Samir Sharifov during the meeting noted the bank faced serious difficulties due to serious violations committed by the former management of the IBA, as well as the devaluation of the manat. The minister added that the government had provided the bank with consistent financial assistance.

"The transfer to the state within the framework of the proposed plan for the restructuring of the foreign debt of the IBA in the amount of $ 2.4 billion confirms the state's consent to continue supporting the bank. In addition, it includes providing the bank with financial instruments that have a higher credit rating and confidence. We believe that, in addition to long-term stability in a fair form, this plan will serve the interests of foreign creditors," the minister said.

"Ensuring the bank"s long-term stability, as well as a systematic assessment of the preparatory work for privatization in the future shows that it is important to voluntarily restructure not only the bank's assets, but also its liabilities. We are confident that our fair intention will be met by the consent of all our foreign creditors included in the restructuring plan. We are sure they will support the bank in the period of changes for finding long-term solutions," Khalid Ahadov, Chairman of the Board of the IBA, said.

The FIMSA Chairman Rufat Aslanli noted that ensuring the financial recovery of the IBA is very important for the entire banking sector of Azerbaijan.

The bank's information says the plan for voluntary restructuring will be again discussed with foreign creditors on July 13, 2017. The implementation of the plan requires the consent of at least 2/3 of the foreign creditors. -0 ---