Astana Term Sheet 2009

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Transcript of Astana Term Sheet 2009

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    12 November 2009 ..

    TERM SHEETFOR THE FINANCIAL RESTRUCTURING OF

    JSC ASTANA FINANCE AND ITS SUBSIDIARY ASTANA FINANCE B.V.

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    TABLE OF CONTENTSPage

    1. Introduction : 12. Key Data on the Proposed Restructuring and Principal Terms 13. Definitions 24. Overview of the Restructuring Process and Timetable 55. General Terms of the Restructuring 7"6. Terms of the Restructuring Do~umentation ~ : 117. Issue of Equity to the Restructuring Creditors 17Schedule 1- Key Restructuring Documents : 20Schedule 2 - Trade Finance Debt : 21Schedule 3 - Conditions Precedent. : ,2 2Part A, Conditions Precedent to the Recommendation of the Restructuring and Submission ofthe Restructuring Documentation to all Creditors 22Part B, Conditions Precedent to the Restructuring , 24Schedule 4 - Terms of Restructuring, Senior Creditors :..27Schedule 5 ~ Terms of Restructuring, Domestic Senior Creditors 28Schedule 6 - Terms of Restructuring, Domestic Subordinated Creditors 29Schedule 7 - Terms oft~e Replacement Notes 30Schedule 8 _ Terms of the Recovery Notes.. 33Schedule 9 - Recovery Notes Control Matters 37

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    1. INTRODUCTIONThis term sheet (the "Term Sheet") dated 12November 2009 outlines the terms for aproposed financial restructuring (the "Restructuring") of JSC Astana Finance (the"Company") and its subsidiary Astana Finance B.V. The Company and the JSCAstana Finance. Creditors' Committee (the "Creditors' Committee") have togetherreached an agreement under which the Creditors' Committee has agreed, subject to theconditions set forth herein, to recommend the terms set out in this Term Sheet to theCompany's international financial creditors as a whole. The terms set out in this TermSheet have not otherwise been approved by any financial creditor of the Company.

    2. KEY DATA ON THE PROPOSED RESTRUCTURING AND PRINCIPALTERMSThe objective of the Restructuring is to develop a plan for the restructuring of theGroup's existing debt, on terms that shall be both acceptable to creditors and ensurethe on-going financial health of the Company.The Restructuring should take the following form:(i) Senior Debt will be exchanged for the following securities:

    a minimum of US$ 350 million (subject to reconciliation andagreement by the Committee and subject to increase as providedbelow, equivalent to approximately 35% of the sum of outstandingprincipal and interest accrued but unpaid up to (but excluding) theRestructuring Date on the existing indebtedness held by SeniorCreditors, of new Eurobonds to be issued or guaranteed by theCompany with a final maturity date of 7 years and otherwise on theterms described in Schedule 7 (Terms of the Replacement Notes)("Replacement Notes"); the debt carry level remains subject tonegotiation; as stated in the Memorandum of Understanding, theCreditors' Committee anticipates that there may be some upwardadjustment in the aggregate principal amount of the ReplacementNotes; provided that the aggregate principal amount of theReplacement Notes shall be subject to increase, as mutually agreedbetween the Company and the Creditors' Committee, by reference to,among other things, (a) any cash contribution that existingshareholders shall make to the Company or to the Senior Creditors inconnection with the Restructuring, whether in respect of the ComfortLetters (as defined below) or otherwise (it being understood that, inany event, nothing contained in this Term Sheet shall constitute orimply a waiver by any Senior Creditor of any claim or rights it mayhave against any such existing shareholder under or pursuant to theComfort Letters or otherwise and each Senior Creditor shall remainfree to pursue any such claims or rights it may have); and (b) the termsultimately agreed with "trade finance creditors".

    recovery loan notes to be issued or guaranteed by the Company with afinal maturity of 8 years and otherwise on the terms described inSchedule 8 (Terms of the Recovery Notes) ("Recovery Notes")

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    evidencing the rights of the holders to receive 60% of (a) recoveries bythe Company on its claims in respect of disputed derivativestransactions which the Company has advised the Creditors' Committeeit is pursuing and (b) the excess of recoveries by the Company over thenet book value on 30 September 2009 or the Restructuring Date(whichever net book value is lower) of any and all loans, investmentsor other assets of the Company, as mutually agreed between theCompany and the Creditors' Committee and set out in a schedule to theRestructuring documentation; and shares in the Company representing in aggregate 58.9% of theCommon Shares of the Company outstanding immediately post-Restructuring.

    (ii) Domestic Senior Debt will be modified by extending the maturity to a datewhich is 20 years after the Restructuring Date and subordinating all claims ofDomestic Senior Creditors to the claims of the Senior Creditors.(iii) Domestic Subordinated Debt will be modified by extending the maturity to adate which is 25 years after the Restructuring Date with a 15 year graceperiod.(iv) Excluded Debt will not be part ofthe Restructuring.

    3. DEFINITIONS"Appointment Letter" The - appointment letter between theCompany and the Creditors' Committeedated 21 August 2009."Business Day" A day on which commercial banks andforeign exchange markets settle paymentsand are open for general business in London,.Almaty and New York City."Business Plan II The Management and ProposedRestructuring Plan of the Company dated 21September 2009, as presented to theCreditors' Committee and approved by the

    board of directors of the Company, and asamended to reflect the agreed terms of theRestructuring."Comfort Letters" The comfort letters issued to financialcreditors by the Municipality of Astana, theKazyna Fund for Sustainable DevelopmentJSC or Samruk-Kazyna."Common Shares" Common, voting shares of the Company,which shall comprise all of the authorisedand issued share capital of the Company on

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    the Restructuring Date."Company" JSC Astana Finance."Creditors' Committee" The Creditors' Committee of the financialcreditors of the Group consisting of NomuraInternational PIc, Banco Finantia SA,Franklin Templeton Investment ManagementLimited, Landesbank Berlin AG andPortland Worldwide Investments Ltd."Deloitte" Deloitte LLP, Kazakhstan, auditors of theCompany."Domestic Senior Creditors" Holders of Domestic Senior Debt."Domestic Senior Debt" Tenge denominated bonds (other thansubordinated bonds) issued by the Companyand governed by RK law."Domestic Subordinated Creditors" Holders (including theRK Government) ofDomestic Subordinated Debt."Domestic Subordinated Debt" Tenge denominated subordinated bonds andother Tenge denominated subordinated debt(or, in the case of RK Government held debt,non-subordinated Tenge denominated debt)issued or guaranteed by the Company and.governed by RK law, other than ExcludedDebt."ECAs" Export-Import Bank of the United States,Export Development Canada (EDC), OfficeNational du Ducroise NationaleDelcrederedienst (ONDD), Euler-HermesKreditversicherungs (Hermes), CompafiiaEspafiola de Seguros de Credito a laExportaci6n (CESCE), Finnvera pIc, ExportCredit Insurance Corporation (KUKE) and

    Swiss Export Risk Insurance (SERV)."Excluded Creditor" JSC Entrepreneurship Development Fund"Damu"."Excluded Debt" Debt owed by the Company to the ExcludedCreditor, in the total amount (includingprincipal and interest) of Tenge 2.8 billionwith a final maturity in July 2013, andborrowed under' the State Progranime onFinancing Small and Medium.Entrepreneurship in the Republic of

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    Kazakhstan."Existing Eurobondholders" Holders of Existing Eurobonds."Existing Eurobonds" To the extent outstanding (not having beenpreviously purchased or redeemed andcancelled) as at the Record Date:

    (i) the Finance Subsidiary's US$ 175million 9.00% Notes due 2011 jointlyand severally guaranteed by theCompany and the Leasing Subsidiary(ISIN: XS0275278256); and(ii) all GMTN Notes issued under theUS$ 2 billion Global Medium Term

    Note Programme established by theCompany and the FinanceSubsidiary.

    "Existing Trustees" The Bank of New York Mellon and CiticorpTrustee Company Limited."Finance Subsidiary" Astana Finance B.V:"FMSA" The Agency of the Republic of Kazakhstanfor the Regulation and Supervision of theFinancial Market and Financial

    Organisations."GMTN Notes" Tlie EUR 340,000,000 7.875% Notes due2010 (ISIN: XS0304676637), the U.S.$.10,000,000 Floating Rate Notes due 2011(ISIN: XS0359435012) and the U.S.$35,000,000 14.50% Notes due 2013 (ISIN:

    XS0373189579)."Group" The Company and its subsidiaries for thetime being."KASE" Kazakhstan Stock Exchange."Leasing Subsidiary" JSC Astana Leasing Company."Memorandum of Understanding" The memorandum of understanding enteredinto by the Company and the Creditors'Committee on 16 October 2009."Notes Trustee" The trustee for the holders of theReplacement Notes and the Recovery Notes.'

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    "Record Date" As defined in Section 4 (OVerview of theRestructuring Process and Timetable).

    "Restructured Debt" As described in Section 5 (General Terms ofthe Restructuring).

    "Restructuring Creditors" Senior Creditors, Domestic Senior Creditorsand Domestic Subordinated Creditors (butnot Excluded Creditors).

    "Restructuring Date" As defined in Section 5 (General Terms ofthe Restructuring).