London Court agrees to protect Int’l Bank of Azerbaijan
Following the New York court, the London court also made a positive decision regarding the International Bank of Azerbaijan (IBA) to prevent lawsuits in the UK from foreign creditors regarding the bank's assets, the IBA reported on June 7.
Foreign creditors will not be able to make claims against the assets or liabilities of the bank without its authorization. This contributes to the process of voluntary restructuring of the IBA commitments to foreign creditors.
The IBA has recently 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 total amount of these commitments is $ 3.3 billion.
Before the transfer of debts to the government is completed, the implementation of foreign creditors' foreign currency liabilities (with the exception of payment of interest on transactions for trade financing) is suspended.
As for other obligations of the bank, including operations on all deposits of legal entities and individuals, both for nationals and non-residents, their execution will continue in the current regime.
The bank has been operating since 1992 and is one of the country's two state banks.
In July 2015, President Ilham Aliyev signed a decree on the measures for rehabilitation related to the preparations for privatizing the state-owned shares of the IBA.
The drawbacks in the management, investment and loan policy of the IBA, as well as financing of less efficient, risky investment projects worsened the Bank's financial state, caused increase in the share of distressed assets and reduced its liquidity.