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DGAP-Regulatory: Kazakhstan Kagazy PLC: announces that it is exiting the logistics business
Kazakhstan Kagazy PLC / Miscellaneous
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Kazakhstan Kagazy PLC announces that it is exiting the logistics business to focus on its burgeoning paper & recycling business
Kazakhstan Kagazy has agreed to transfer its Class A Warehouse and Container Terminal businesses to Investment Fund of Kazakhstan ('IFK'), as a result of IFK enforcing outstanding debts against the assets of these businesses.
Despite the profitability of the logistics business, where EBITDA grew from almost zero in 2009 to more than USD 5 million in 2013, and management's efforts to restructure the IFK loan, the Company was unable to reach a mutually acceptable restructuring solution. This was due to the gulf between the debt capacity of the logistics business and the size of the IFK loan.
The unsupportable loan was originally drawn down from Development Bank of Kazakhstan ('DBK') by the Company's former management and the DBK loan was then purchased by IFK in 2013. The Company has commenced proceedings against former management and shareholders in the London High Court, and alleges that $53.5m of the original DBK loan was misappropriated.
The Company's CEO, Tomas Mateos Werner, commented:
'The Class A Warehouse and Container Terminal businesses were unfortunately not profitable enough to carry the IFK debt, which we allege was fraudulently disbursed by the Company's former shareholders. For over four years we have used the growing cash flow from these businesses to repay the debt. We have also tried to reach a mutually acceptable debt restructuring agreement, which unfortunately has not been possible. Our priority now is to work together with IFK to ensure that the maximum amount of jobs are saved and that service to our clients continues uninterrupted.
Our key paper & recycling business remains strong, and I look forward to announcing our plans for the development of this business over the coming months.'
| Contact: | |
| Peter Roberts,Bell Pottinger | +44 207 861 3800 / This email address is being protected from spambots. You need JavaScript enabled to view it. |
| Sarosh Zaiwalla, Zaiwalla & Co | +44 207 312 2000 / This email address is being protected from spambots. You need JavaScript enabled to view it. |
13.01.2014 EquityStory.RS, LLC's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and http://www.dgap.de
| Language: | English |
| Company: | Kazakhstan Kagazy PLC |
| 33-37 Athol Street | |
| IM1 1LB Douglas | |
| Isle of Man | |
| Phone: | +7-727-244-87-87 |
| Fax: | +7-727-244-87-82 |
| E-mail: | This email address is being protected from spambots. You need JavaScript enabled to view it. |
| Internet: | http://www.kazakhstankagazy.com |
| ISIN: | US48667M2035 |
| Listed: | London |
| Category Code: | MSC |
| TIDM: | KAG |
| Sequence Number: | 1841 |
| Time of Receipt: | Jan 13, 2014 13:02:38 |
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