Kazakhstan Kagazy PLC
Kazakhstan Kagazy PLC: announces that it is exiting the logistics business

Kazakhstan Kagazy PLC  / Miscellaneous

13.01.2014 13:02

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Kazakhstan Kagazy PLC announces that it is exiting the logistics business
to focus on its burgeoning paper & recycling business

Kazakhstan Kagazy has agreed to transfer its Class A Warehouse and
Container Terminal businesses to Investment Fund of Kazakhstan ('IFK'), as
a result of IFK enforcing outstanding debts against the assets of these
businesses.

Despite the profitability of the logistics business, where EBITDA grew from
almost zero in 2009 to more than USD 5 million in 2013, and management's
efforts to restructure the IFK loan, the Company was unable to reach a
mutually acceptable restructuring solution. This was due to the gulf
between the debt capacity of the logistics business and the size of the IFK
loan.

The unsupportable loan was originally drawn down from Development Bank of
Kazakhstan ('DBK') by the Company's former management and the DBK loan was
then purchased by IFK in 2013. The Company has commenced proceedings
against former management and shareholders in the London High Court, and
alleges that $53.5m of the original DBK loan was misappropriated.

The Company's CEO, Tomas Mateos Werner, commented:
 
'The Class A Warehouse and Container Terminal businesses were unfortunately
not profitable enough to carry the IFK debt, which we allege was
fraudulently disbursed by the Company's former shareholders. For over four
years we have used the growing cash flow from these businesses to repay the
debt. We have also tried to reach a mutually acceptable debt restructuring
agreement, which unfortunately has not been possible. Our priority now is
to work together with IFK to ensure that the maximum amount of jobs are
saved and that service to our clients continues uninterrupted.
 
Our key paper & recycling business remains strong, and I look forward to
announcing our plans for the development of this business over the coming
months.'




Contact:
Peter Roberts, Bell Pottinger, 
+44 207 861 3800 / proberts@bellpottinger.com 

Sarosh Zaiwalla, Zaiwalla & Co
+44 207 312 2000 /
s.zaiwalla@zaiwalla.co.uk



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Language:           English
Company:            Kazakhstan Kagazy PLC
                    33-37 Athol Street
                    IM1 1LB Douglas
                    Isle of Man
Phone:              +7-727-244-87-87
Fax:                +7-727-244-87-82
E-mail:             ir@kagazy.kz
Internet:           www.kazakhstankagazy.com
ISIN:               US48667M2035
Listed:             London
Category Code:      MSC
TIDM:               KAG
Sequence Number:    1841
Time of Receipt:    Jan 13, 2014 13:02:38
 
End of Announcement                       EquityStory.RS, LLC News-Service
 
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