Article 14-3. Conditions and procedure for pre-trial debt settlement and measures applied to an insolvent borrower of the Law on Project Financing and Securitization

Home / Laws / Article 14-3. Conditions and procedure for pre-trial debt settlement and measures applied to an insolvent borrower of the Law on Project Financing and Securitization

1. If there is a delay in fulfilling the obligation under the syndicated loan agreement, but no later than fifteen calendar days from the date of its occurrence, the agent bank is obliged to notify the borrower in the manner and within the time limits stipulated in the syndicated loan agreement,:

1) the occurrence of a delay in fulfilling the obligation under the syndicated loan agreement and the need to make payments under the syndicated loan agreement, indicating the amount of overdue debt as of the date specified in the notification;

2) the borrower's right to apply to the agent bank with a request to amend the terms of the syndicated loan agreement;

3) the consequences of the borrower's failure to fulfill its obligations under the syndicated loan agreement, indicating the clauses of the syndicated loan agreement providing for measures against the insolvent borrower.

2. Within thirty calendar days from the date of the delay in fulfilling the obligation, the borrower has the right to submit to the agent bank a written statement or in the manner provided for by the syndicated loan agreement, containing information on the reasons for the delay in fulfilling the obligation under the syndicated loan agreement, income and other confirmed circumstances (facts) that determine his application for amendments to the terms of the syndicated loan agreement. financing, including those related to:

1) a downward change in the interest rate under the syndicated loan agreement;

2) deferral of payment on the principal debt and (or) remuneration;

3) changing the method of debt repayment or the order of debt repayment, including repayment of the principal debt on a priority basis;

4) changing the term of the syndicated loan agreement.

3. The agent bank, within one business day following the day of receipt of the borrower's written application, sends it to the participants of the syndicate of creditors, who, within thirty calendar days after the date of receipt of the borrower's written application, review the proposed amendments to the terms of the syndicated loan agreement and, based on a decision taken by the creditors, with a financing share of at least two thirds of the total amount of financing, in writing or in the manner provided for by the syndicated loan agreement, inform the agent bank about:

1) acceptance of the proposed amendments to the terms of the syndicated loan agreement;

2) their proposals on changing the terms of the syndicated loan agreement;

3) refusal to change the terms of the syndicated loan agreement, indicating a reasoned justification for the reasons for such refusal.

The agent bank shall forward the decision to the borrower within one business day following the day of receipt of the decision by the participants of the creditors' syndicate.

4. In cases of dissatisfaction with the requirement provided for in subparagraph 1) paragraph 1 of this Article, as well as the borrower's failure to exercise the rights provided for in paragraph 2 of this article, or the lack of agreement between the borrower and creditors on changing the terms of the syndicated loan agreement, creditors have the right to decide on:

1) foreclosure on mortgaged property in an out-of-court or judicial manner;

2) assignment of a right (claim) under a syndicated loan agreement;

3) filing a claim with the arbitration court for the recovery of the amount of debt under the syndicated loan agreement;

4) filing an application to the court for the application of a rehabilitation procedure against the borrower or for declaring the borrower bankrupt in accordance with the legislation of the Republic of Kazakhstan.

The agent bank performs actions on behalf of and in the interests of the participants of the creditors' syndicate in accordance with subitems 1), 3) and 4) of paragraph 4 of this Article.

5. Before creditors make the decisions referred to in paragraph 4 of this article, creditors are required to take pre-trial settlement measures provided for in paragraphs 1, 2 and 3 of this article.

The Law of the Republic of Kazakhstan dated February 20, 2006 No. 126.

This Law establishes the legal basis and conditions for project financing and securitization in the Republic of Kazakhstan, defines the specifics of the assignment of claims and the legal regime of property in project financing and securitization, the legal status of a special financial company, as well as the legal basis and conditions for syndicated financing.

President

Republic of Kazakhstan

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