In recent years, many companies in Kazakhstan are experiencing shrinking asset valuesand increasing debt burdens. Effectively dealing with these issues requires guidance from lawyers who can assist with debt restructuring, insolvency and funding challenges.
Before insolvency proceedings have been initiated against a Kazakh debtor, a Kazakh borrower will normally seek one or a combination of concessions from lenders, depending mainly on their current and projected cash flows. These may include, for example, temporaryrelief from making payments; a postponement of the maturity date; other changes in the payment schedule;forgiveness of part of the indebtedness; debt for equity swaps; waiver of breaches of covenant; releases from certain financial or other covenants; standstill provisions, i.e., creditors’ agreement not to exercise certain rights or remedies; and provision of additional financing.
The Law of the Republic of Kazakhstan “On Rehabilitation and Bankruptcy” No. 176-V ЗРК dated 7 March 2014 (the “Bankruptcy Law”) provides for the following three insolvency regimes that may be applied to a Kazakh insolvent debtor if out-of-court workout did not work:
1. accelerated rehabilitation;
2. rehabilitation; and
Accelerated rehabilitation and rehabilitation are intended to rescue the debtor. A final liquidation (i.e., bankruptcy) guillotines the debtor.
Accelerated rehabilitation can be initiated by the debtor in the court proceeding provided that no rehabilitation or bankruptcy proceeding has been initiated against the debtor and the debtor is insolvent or will not be able to meet his or her monetary obligations on the due date within the next 12 months. Under the Bankruptcy Law, the debtor is insolvent if one or more of the following conditions are met: a) non-payment under health or life damage obligations, obligations to its employees, social insurance and pension payments, payments under copyright agreements within three months after they became due for the amount of 100 so-called monthly calculated indexes (approximately US$580); b) non-payment under tax and other budget obligations within four months after they became due for the amount of 150 monthly calculated indexes (approximately US$880); c) non-payment by a debtor – legal entity under any other obligations within three months after they became due for the total amount of 1,000 monthly calculated indexes (approximately US$5,900). Upon introduction of accelerated rehabilitation by the court, the following main legal implications arise:
1. the debtor may not use and realise its property except in the course of regular commercial operations, if provided by the rehabilitation plan or upon consent of the affected creditors;
2. a stay of enforcement of court decisions or arbitration awards issued earlier upon claims of affected creditors;
3. the affected creditors cannot file for bankruptcy of the debtor; and
4. withdrawal of money from the debtor’s account and foreclosure of the debtor’s property is prohibited.
Rehabilitation may be initiated in the court proceeding by either the debtor itself or its creditors. The debtor may file for rehabilitation if he or she is either insolvent or unable to meet his or her monetary obligations on the due date within the next 12 months. Creditors may file for rehabilitation if the debtor is insolvent. Unlike accelerated rehabilitation, within a rehabilitation procedure creditors may decide to deprive existing shareholders and pass management over the debtor to a specially appointed rehabilitation manager. The legal implications of the introduction of rehabilitation by the court are generally the same as for the accelerated rehabilitation discussed above.
Bankruptcy may be initiated in the court proceeding by the debtor itself, creditors, the prosecutor, the rehabilitation manager, or if, in the course of rehabilitation, it turns out that rehabilitation is not possible, the state body responsible for tax and other payments to the budget. Upon resolution of the court on the bankruptcy of the debtor, the bankruptcy manager realises the debtor’s property through public auction and satisfies the claims of the creditors included on the register of creditors’ claims in the prescribed by law order of priority (e.g. secured creditors are second in line of priority).
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On 30 November 2017 in Bishkek GRATA International organised a practical seminar: Roadmap to Profitable Small Hydro Power Plant Development, together with international engineering firm ILF Consulting Engineers.
On 28 November 2017 in Almaty GRATA International organised a practical seminar: Roadmap to Profitable Small Hydro Power Plant Development, together with international engineering firm ILF Consulting Engineers.
On 7 December 2017, the results of the national law firms rating – ‘Право.ru-300’ were announced.
On 6 December 2017 the drinks reception was held in Astana, Kazakhstan.
On 5 December 2017 the International Conference "PPP Projects in International Context" was held in Frankfurt-on-Main, Germany.
Yerzhan spoke on key questions of PPP projects implementation in Kazakhstan, particular issues of national legislation, basis PPP models in Kazakhstan, issues relating to regulation of PPP projects and key trends of development of PPP in the near future.
On November 28th, 2017 Nurlan Kyshtobaev, partner of GRATA International Bishkek office conducted a guest lecture on “concession agreements” and “how law firms operate”. The lecture was read to the students of International Business Law department of the American University of Central Asia (AUCA) within the course “Investment Law and Sustainable Development”. Earlier this year, GRATA International in Bishkek signed a MoU with AUCA on cooperation.
4th Downstream Caspian & Central Asia conference was held in Baku, Azerbaijan on November 28.
On 22 November 2017 Dubai Chamber Annual Networking Reception took place in Azerbaijan, Baku with the aim of highlighting achievements, discussing plans, and reward most active companies.
On November 16, 2017, American Chamber of Commerce in Azerbaijan (AmCham Azerbaijan) organized its monthly members’ luncheon.
AmCham Legal and Compliance Working Group hosted its regular meeting on November 1, 2017.
The opening ceremony of the Baku-Tbilisi-Kars railway (BTK) was held on October 30, 2017 in Baku.
On October 31, 2017, MilliMajlis of the Republic of Azerbaijan ratified a new production sharing agreement.
Since 1991, Kazakhstan, Central Asia’s largest economy and oil producer, has had to rely on the deteriorating infrastructure it inherited from the Soviet Union. As a result, nearly every piece of public infrastructure (e.g., roads, hospitals, power plants, kindergartens, sewerages) in Kazakhstan requires a different degree of upgrading or expansion. It is expected that proper PPPs and project finance deals will finally take off in Kazakhstan in the near future, firstly because proper legislation on PPPs has been put in place in 2015 and, secondly, after decades of neglect, the government of Kazakhstan has finally not only declared, but seems to confirm its readiness to improve the investment climate and to attract private investments through PPPs (including into the housing and utilities sector) and decided to invest at least part of the wealth from commodity exports in long-postponed infrastructure projects.
Yana Dianova, Director of the Corporate and Commercial Law Department of GRATA International (Moscow office), took part in the preparation of the Doing business 2018 annual report by the World Bank on the Russian Federation.
С 10 по 16 ноября 2017 года Каспийский Университет принял юристов GRATA International в качестве лекторов по актуальным темам.
We are proud announce that GRATA International has been ranked as an Outstanding Law Firm by Asia Law Profiles 2018
On 13 November 2017, in celebration of 20 years of GRATA International in Atyrau, we organised a Doing business in Kazakhstan via a Joint Venture and Consortium seminar.
As a further step in GRATA International’s strategy designed to provide a comprehensive coverage in the Eurasian region, we are pleased to announce the expansion of our Mongolian desk into a significant presence in Ulaanbaatar. Absolute Advocates, a full-service law firm, has started operating as an associate firm of GRATA International with effect from November 10, 2017.
On 7 November 2017, a round table ‘Strategy 2025’ was held in Almaty.
On 2-3 November 2017, the XII Forum of Corporate Lawyers was held in Almaty. GRATA International took part in the Forum as speakers.
On 13 November 2017, in celebration of 20 years of GRATA International in Atyrau we are organising a DOING BUSINESS IN KAZAKHSTAN VIA JOINT VENTURE AND CONSORTIUM seminar.
And again October, and again the time of the rating IFLR1000.
In the company section of IFLR 1000 Financial & Corporate we have gone up and take a worthy place in Tier 2! Similarly, we are located in the section Project Development, which replaced Energy & Infrastructure.
Associate office of GRATA International in Samara RBL law office became a partner of the large industrial park of the Samara region
On 10 November, Bakhyt Tukulov, Partner, Director of the Litigation Practice, will speak at the Caspian University.
Preparations are being made in Belarus for the introduction of a new institute in the consulting sphere - tax advising. Edict of the President adopted on September 19 serves this purpose by approving the Regulation on the activities of tax advisers in Belarus.
On 13 October 2017, in Atyrau, at the Renaissance Hotel, GRATA International hosted a Termination of employment agreement seminar devoted to labour law regulation of the Republic of Kazakhstan.
Статья управляющего партнера Ассоциированного офиса GRATA International в Новосибирске (Россия) USCONSALT Евгении Бондаренко о проверке российского контрагента перед сделкой.
Статья управляющего партнера Ассоциированного офиса GRATA International в Новосибирске (Россия) USCONSALT Евгении Бондаренко о соблюдении ряда обязательных требований при принятии процессуального обращения арбитражным судом Российской Федерации.
GRATA International is delighted to confirm that Shaimerden Chikanayev has been endorsed as a Highly regarded lawyer for Financial & Corporate law following client and peer recommendations during IFLR1000's research process.
On 6 October 2017, the Union of German Economy in the Republic of Kazakhstan and Representative Office of the German Economy in Central Asia held the 19th Day of German Economy in Kazakhstan.
On 5 October 2017, the International Investment Forum - "Almaty Invest" - was held. The Forum platform annually incorporate about 500 high-ranking participants.
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