A default in Debt Securities occurs when the Issuer fails to meet its (i) financial obligations, such as making coupon (interest) payments or repaying the principal amount to bondholders on a due date, or (ii) other obligations (covenants) triggering an event of default pursuant to the Prospectus, offer document or Offer Terms, as applicable, such as occurrence of a cross-default in respect of the Issuer’s other payment obligations or a bankruptcy event.
Action expected from the Issuer:
Announcement of a default or potential default event to the market via AIX Regulatory Announcement Service (Company Disclosure) as soon as it becomes apparent that such an event is imminent, but in any case no later than the due date for the Issuer’s financial obligation. The announcement must be transparent, provide certainty and predictability, and contain at least the following information:
– Expected date of the default
– Nature of the default and default amounts
– Description of events leading to the default
– Proposed timeline for the default remedy and orderly handling of claims in case of an actual default
– Proposed arrangement on debt restructuring, if applicable, and process for the bondholders’ consent solicitation
– Guidance to the bondholders on other possible actions (their scope), the circumstances in which action may be taken, who may take it, and other procedures aimed at protecting the bondholders’ rights
It is recommended that information should be available to the market participants in clearly understandable terms.
Announcement about full or partial fulfilment and/or remedy of any defaulted obligations.
Notification to AIX at [email protected] no later than 11:00 Astana time on the day immediately following the date of the default, including:
– Date of the default
– Nature of the default and overdue amounts
– Description of events leading to the default
– Proposed action plan and timeline for the default remedy
– Contact details (name, position, phone and e-mail) of a person responsible for communication with AIX in relation to the default, if such person is different from Responsible Person indicated in the listing application.
AIX Action:
AIX will engage with the Issuer to ensure accurate disclosure of default and financial position to the market.
If the Issuer fails to disclose accurate information about the Issuer’s default and its financial position, AIX may take a regulatory action, including suspension of trading in the Issuer’s Securities, which will be announced to the market via AIX Market Notices.
AIX will inform AFSA, an independent regulator of the AIFC, on Defaulted Security based on information received from the Issuer.
Information on the Defaulted Securities will be updated by AIX on this page.
ISIN
Ticker
Issuer
Instrument type
Admission type
Default type (coupon / principal)
Initial Due Date
Status / Expected remedy date
KZX000001185
NEF.1123
NEF Qazaqstan LLP
Bond
Public
Principal KZT 4,022,315,000 and the last coupon KZT 402,231,500
23-30 Nov 2023
Issuer’s Announcement dd 30.11.23 on deferred repayment by 21 December 2023 with accrued penalty interest; Guarantor’s confirmation dd 12.12.23. Issuer’s and Guarantor’s Announcement dd 21.12.23 on prolongation of the repayment period until 30 April 2024; Issuer’s delivery of coupon in full to AIX CSD on 30.01.24; Issuer’s delivery of partial principal payment on 29.03.2024; The AIFC Court judgement dated 10.04.2024.
Action by Investor
The terms that govern the relationship between an Issuer and Investors can be found in the Prospectus, offer document or Offer Terms, as applicable. These documents are available at the AIX Regulatory Announcement Service (Company Disclosure). Investors shall seek in those documents for the available mechanisms to address the defaulting Issuer’s obligations (that may include enforcing a guarantee or other).
Investors, having concerns about the actions they should take, should seek advice from their independent professional advisers or consultants.
Below are illustrative examples of possible legal action that Investors may take, subject to the respective terms of the securities as set out in the Prospectus, offer document of Offer Terms, which is not intended to be an exhaustive list of all possible actions:
– The Investor may submit a formal claim to the Issuer and/or the Guarantor (if any)
– The Issuer and Investors may engage in negotiations with the aim of restructuring the Issuer’s defaulted payment obligations
– The Investor may initiate a legal action at the court of the jurisdiction set in the Prospectus, offer document or Offer Terms. Please check sections of the said documents (as applicable) on a governing law and dispute resolution.
If dispute resolution is stipulated to take place in the AIFC Courts per the terms outlined in the Prospectus, offer document or Offer Terms, as applicable, the Investor may reach out to the AIFC Court for general enquiries:
If there is an arbitration clause stipulating the AIFC International Arbitration Centre (the AIFC IAC) as a forum for dispute resolution, then the Investor may reach out the AIFC IAC for general enquiries:
Subject to the AIFC Court regulations and rules, in the AIFC Court the investors may represent their interests themselves, or appoint a legal representative, having obtained a right of audience at the AIFC Court, who may act on behalf of the Investor or Investors collectively for any class action lawsuit, if any.
AIFC introduced the regime for regulation of Legal Advisers on an individual level to ensure high professional standards of competence, ethics and integrity in the provision of legal services in the AIFC. The roll of lawyers practicing the AIFC Law registered by the AIFC Legal Services Board can be found here: Legal-Services-Regulation.
There is also a list of the AIFC firms authorized by AFSA to provide Legal and Consulting Services in the AIFC, available in the AFSA’s public register of the Ancillary Service Providers: publicreg.myafsa.com
If investors have a complaint which they wish to address to AIX, they may follow procedure outlined at Making-a-complaint
If investors have a complaint which they wish to address to AFSA, an independent regulator of the AIFC, they may follow the procedure outlined at Submit-Complaint
Disclaimer: this guidance is issued for information purposes and is not intended to be legal advice. If you are unsure about the action you should take, please consult with your legal adviser.
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