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. Last Updated: 07/27/2016

Menatep Offers Plan To Rescue Tokobank




One of Russia's biggest banks, Bank Menatep, is ready to work on a new rescue plan for troubled Tokobank, Menatep said Wednesday.


The plan, which was agreed upon with the Central Bank, would involve purchasing a controlling stake in the bank and converting some of its debts into Bank Menatep's own long-term debt instruments, Menatep said in a statement.


Russia's Central Bank earlier this month appointed a new temporary administration for Tokobank after a previous rescue package involving the Bank of Moscow failed to get off the ground.


"Bank Menatep is ready to take upon itself the task of working out and implementing an action plan to get Tokobank out of its crisis," Menatep said, adding that the Central Bank had agreed in principle to the proposal.


"The basic points of the rescue program will be restructuring Tokobank's debt and bringing under control credit portfolios and obligations on forward contracts," Bank Menatep said.


Bank Menatep head Alexander Zurabov was quoted as saying Tokobank's liquidation posed a threat to the whole Russian banking system. "Moreover, not all possibilities for resolving Tokobank's problems have been exhausted," he said.


Bank Menatep said it would work on formal proposals with representatives of Tokobank's creditors in the next two weeks.


Tokobank is estimated to owe foreign creditors $320 million and Russian creditors $340 million. Its near-term and overdue obligations were put at $80 million in May.


Meanwhile, WestMerchant Bank issued a statement Tuesday in London saying that contrary to market rumors it had not taken any legal action against Tokobank over an outstanding $60 million syndicated loan.


"Contrary to such rumors, WestMerchant is not taking any individual action against Tokobank with regard to any rights it may have as a member of the syndicate for that loan facility," said WestMerchant, part of German bank WestLB Group.


The statement said any legal action would have to be taken by Barclays as agent bank and would need approval from at least two-thirds of syndicate members.


A spokesman for Barclays had no immediate comment on the WestMerchant statement.


One syndicate source said members of the syndicate had the right to exercise a cross default clause and call in the loan, but at least some wanted to see whether a rescue package for the Russian bank would emerge.


"We've got a long-term interest in the Russian market," said one banker. "We're keen for some kind of rescue package for Tokobank to materialize."