Bank tries to reclaim debts (210 words)

Published: 8/14/2000

Kazakh bank Kazkommertsbank has filed a court action against national carrier Air Kazakstan and Almaty Airport, both wholly owned subsidiaries of state owned Air Kazakhstan Group (AKG), claiming that it is owed $40m by the two entities. As both companies have pledged property assets against the borrowing from the bank, there is local speculation that the two entities could potentially be bankrupted. There is even speculation that the bank could take control of the airline and airport and run them itself, a move that would be an interesting development considering the airline was only recently saved from collapse by a reorganisation of the sector earlier this year. Such a move is however, likely to be strongly opposed by the government and the AKG. The size of the liability to Kazkommertsbank also completely contradicts the assertions by Alexander Krinichansky, President of AKG, in December 1999, when he claimed that the rumours that the air transport group had debts of $100m were grossly exaggerated and that the figure was nearer to $25-30m. The action may also dampen the efforts of Krinichansky to have the airline privatised, with reports of attracting Taiwanese and Israeli investors to a 60% share in the carrier.

Article ID: 1993