OREANDA-NEWS. February 20, 2014. JSC Kazkommertsbank (“KKB”) and Mr. Kenes Rakishev have reached a final agreement to purchase a 46.5% equity stake in JSC BTA Bank (“BTA”) each, from JSC Sovereign Wealth Fund “Samruk-Kazyna” (“SK”).

SK to transfer its remaining 4.26% in BTA to KKB under a Trust Agreement providing KKB with over 50% voting rights and operational control of BTA

SK will maintain its participation in KKB’s equity and option agreement signed in 2009 between SK and KKB’s major shareholders will be extended by 3 years

Purchase price of KZT 72 075 million or approximately US\\$ 465 million to be paid by KKB for its 46.5% stake

Implied valuation of 100% of BTA equity at approximately US\\$ 1 billion or 0.5 x BV as of 30 September 2013

Purchase price to be paid by KKB in cash: KZT 31 billion at closing and KZT 41 075 million no later than 1 July 2017

Transaction approved by the Board of Directors of KKB on 5 February 2014 and is recommended to shareholders

Merger of KKB and BTA is expected following completion of the transaction

Ms. Nina Zhussupova, CEO, KKB, noted that “This is a transformational transaction for KKB. The acquisition and subsequent merger of BTA and KKB are expected to create the largest universal bank in the region, creating a large-scale diversified institution with an assets more than 1.5x larger than the next competitor. The merger combined with proven KKB collection capabilities should also enhance the recovery of troubled BTA assets. Generally, we expect that the merger will promote a healthier banking system in Kazakhstan and regaining market confidence”.

Consolidation in the fragmented banking sector is expected to improve the structure of the banking sector in a challenging growth environment. The combined bank should be more resilient towards economic cycles, the effects of the potential introduction of Basel III and consequences for the competitive landscape from the Customs Union and WTO.

The transaction requires SK’s internal corporate decisions, regulatory and antimonopoly approvals and is subject to approval by KKB’s shareholders at the general shareholders meeting scheduled for 21 February 2014. The Board of Directors of SK submitted for the consideration of its Sole Shareholder, a disposal of BTA Bank’s shares.

To ensure the successful closing of the transaction SK, KKB, Mr. Kenes Rakishev and government bodies (including Ministry of Economy and Finance and National Bank) signed on 27 December 2013 a Memorandum of understanding which stipulates certain measures that the authorities are prepared to consider.