International Bank of Azerbaijan modifies plan; claimants meeting set

By Caroline Salls

Pittsburgh, June 20 – OJSC International Bank of Azerbaijan announced Monday that it modified some aspects of its restructuring plan after taking feedback from creditors.

According to a news release, the claimants’ meeting related to the bank’s restructuring will be held on July 18

Among the changes to the plan, the bank said new 2032 notes to be issued by the Republic of Azerbaijan will benefit from an additional amortization payment and thus will be redeemed in three equal annual installments, rather than two installments under the previous plan.

In addition, claimants will not be limited to select only one allocation option, but will be able to request several different allocation options by submitting a separate form of proxy or voting instruction for each amount for which they wish to make a separate election.

The bank said a “first-come, first-served” allocation mechanism has been changed to an 11-business-day early bird period.

Claimants who submit their votes within this period and indicate that they wish to vote in favor of the proposed restructuring plan will receive their preferred allocation irrespective of any limits on the minimum total size of new 2029 notes or new 2032 notes, although the maximum total principal amount of the new notes will still be $1 billion.

The treatment of interest for senior and subordinated liabilities under the plan will also be modified.

Specifically, only claimants who cast their votes in favor of the restructuring plan will receive any entitlements in connection with accrued interest.

Accrued interest will be calculated up to Sept. 1, as opposed to July 13 under the previous version of the plan, and interest on the new notes to be issued as part of the restructuring will correspondingly accrue from Sept. 1.

As a result of that change, the bank said all interest on senior and subordinated liabilities that falls due before Sept. 1 will be paid to claimants in cash on the relevant distribution date, and all other interest that accrues but does not fall due before Sept. 1 will be capitalized and form part of the principal of the claims for the purposes of calculating the amount of new notes to which the claimant will be entitled.

International Bank of Azerbaijan is based in Baku, Azerbaijan. The company filed bankruptcy on May 11 in the U.S. Bankruptcy Court for the Southern District of New York under Chapter 15 case number 17-11311.

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