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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Agriculture is one of the most attractive sectors of Kazakhstan’s economy. Kazakhstan has approximately 24 million hectares of arable land and 188 million hectares of pasture.
On 11-14 October 2018 Elite Global Legal Alliance (EGLA) held its Fourteenth General Meeting & Investment and Financing Innovation Law & Commerce Forum.
On 28 September 2018 An Export Acceleration Mission for Oil, Gas and Energy in Almaty, Kazakhstan was held.
Ibragim Kouky, the Senior Associate at Contract and Real Estate Department participated in the joint FIDIC/ICC Conference (International Federation of Consulting Engineers and International Chamber of Commerce).
In 2017 the International Federation of Consulting Engineers has introduced major amendments to FIDIC 1999 Yellow, Red and Silver Books which have been in use in the construction industry for almost twenty years.
On 20 September 2018, CCI France-Kazakhstan (CCIFK) held a monthly meeting.
Amendments concern business operations relating to performance of works, rendering services and lease relations.
While rendering services, which results the customer can use during the term of the agreement, the date of completing this business operation shall be:
last calendar day of each month of provision of services and the last day of provision of services – if the term of the agreement exceeds one month;
last calendar day of the month, when provision of services is started, and (or) the day of completing of provision of services – if the term of the agreement does not exceed one month.
This Law determines legal conditions of concession, types of state support of concessionaire and regulates social relations arising during conclusion, execution and termination of concession agreements.
This Law determines legal conditions of public-private partnership, ways of its implementation, and regulates social relations arising during preparation and implementation of public-private partnership projects, execution, performance and termination of public-private partnership agreements.
With the approval of the National Development and Reform Commission (NDRC) of the People’s Republic of China, the 10th China Overseas Investment Fair (COIFAIR) was held at the China National Convention Center, PRC on 15-16 September 2018.
On 12 September 2018 Duane Morris & Selvam law venture held Ambassador Series dedicated to Kazakhstan event in Singapore.
As football developes and becomes more popular in Kazakhstan, the legal relationships and arrangements of the parties involved increasingly require compliance with legal formalities. A professional club, sportsman, coach and federations are guided by regulations approved by the international sports organisations and/or concluded contracts.
Although the Kazakhstan securities market is the most developed in Central Asia, its development has been slow compared to the country’s banking sector.
On 5-7 September 2018, a IBA Europe-Caucasus-Asia Forum 2018 was held in Almaty.
Despite the fact that Mongolian legislation provides for a wide range of legal forms of commercial entities (limited liability company or LLC, joint-stock company or JSC and joint venture), in practice, private businessmen and foreign investors mostly prefer LLC or JSC. Representative office of foreign legal entities is also common
Land relations can be a crucial issue for foreign investors considering whether or not to start a business in a particular country. Let us provide you with a summary of land legislation of Belarus and the opportunities it offers for business.
Dmitry Samigullin spoke on Business setup in Russia in Zurich.
On 29 August 2018, the Administration of Almaty (Almaty Mayor’s Office) has officially announced the public tender for participation in PPP project for development of design specification, construction, commissioning, financing, operation and technical maintenance of Almaty Light-Rail Transportation System (the “Project”).
The Law on Amendments Intended to Improve Business Conditions (the “Business Improvement Law”) came into effect on 12 March 2017, except certain provisions.
The purpose of the Business Improvement Law is to further improve the investment climate in line with the general policy of the country to support local entrepreneurs and foreign investors.
Federal Law No. 291-FZ dated 3 August 2018 (Law No. 291-FZ) provides for the establishment and operation of special administrative districts in the territories of the Russian Island (Primorsky Krai) and Oktyabrsky Island (Kaliningrad Region) to form an investment-attractive environment for Russian and foreign investors.
On 5-7 September 2018, a IBA Europe-Caucasus-Asia Forum 2018 will be held in Almaty.
Renewable energy development has recently become hot topic in Kazakhstan that is actively being discussed among market existing and potential participants, relevant state bodies including the Ministry of Energy of the Republic of Kazakhstan (the “MoE”), international development institutions and other stakeholders.
In early July this year we witnessed the opening of the Astana International Financial Center (AIFC). We have seen a large number of reports in the media on the Court and Arbitration at the AIFC, but little has been said specifically on what exactly they can offer to Kazakhstani businesses.
Kazakhstan has high ambitions in China’s Belt and Road initiative (BRI) as it is geographically an ideal junction between China and the west.
During the Month of July 2018 GRATA International (Russian Federation) generated the most usage from Mondaq users for the category of commercial law.
В июле 2018 года наибольшее количество обращений пользователей Mondaq по вопросам коммерческого права получила GRATA International (Россия).
С 01 июля 2018 г. вступили в силу изменения в 214-ФЗ (Федеральный закон «Об участии в долевом строительстве многоквартирных домов и иных объектов недвижимости» от 30 декабря 2004 года), которые значительно усилили требования к Застройщикам.
The competition law regulates matters related to the creation of conditions for fair competition in the market for business entities, identification and implementation of legal and organisational grounds for prohibition, restriction and prevention of any activities impeding competition.
On 17 July 2018, the Board of the Eurasian Economic Commission (EEС) adopted the following acts aimed at regulation of the general market of medicines in the Eurasian Economic Union (EAEU):
Federal Law No. 234-FZ of July 29, 2013 amended the Tax Code of the Russian Federation providing for the cancellation of the state duties for state registration of:
Rules relating to statute of limitation contained in the Civil Code of the Republic of Kazakhstan (the “Civil Code”) may seem relatively straightforward. However, in our practice we frequently encounter situations where rules relating to the calculation of the statute of limitation are erroneously applied or where their applications to relevant facts create disputes. In this article, the author has attempted to provide a practical perspective on some of the most frequently encountered questions relating to the statute of limitation under Kazakh law and express views on the interpretation of certain rules.
Yesterday, 26 July 2018, GRATA International and the CCIFK held a breakfast meeting with the Chamber members.
On 3-4 July 2018, an International PPP Finance Summit 2018 took place in London, UK.
By the end of June of this year Kazakhstan signed the Multilateral convention to implement tax treaty related measures to prevent base erosion and profit shifting (MLI).
Modeled on the Dubai International Financial Centre, the Astana International Financial Centre (AIFC) was officially launched on the 5th July this year, established with the aim of bridging the gap between the world’s major fi nancial centers and a regional gateway for capital and investments.
On June 20, 2018, GRATA International Law Firm signed a memorandum on cooperation in the area of education with IQanat Public Education Fund.
3 июля 2018 года, в отеле Ritz Carlton Astana под председательством Премьер-министра Республики Казахстан Бакытжана Сагинтаева прошел круглый стол по глобальным инвестициям.
On 29 June 2018 Yerbolat Yerkebulanov, Partner of GRATA International (subsoil use practice (Almaty)) was a speaker at the Astana Legal Forum 2018.
Yerbolat Yerkebulanov, Partner, Head of Subsoil Use department (Almaty) of GRATA International was a speaker at the 25th World Mining Congress (WMC).
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