Kenes Rakishev, a well known crisis manager, is fixing the BTA Bank legacy, one issue at a time. To deal with the complex legal issues of the bank he uses Fincraft Group, the multipurpose financial structure. S&P regularly monitors and updates the creditworthiness of the Group. Here is the fresh update.
Kenes Rakishev continues his course on restoring the shape of BTA Bank related assets. His financial powerhorse, Fincraft Group is clearing the mess of abandoned assets. One of the main tasks of Fincraft Group is to get control of the legally challenged assets, unblock them and liquidate in a transparent market manner. The year 2020, despite enormous challenges, was highly successful for Kenes Rakishev company. S&P reflected those efforts in the new rating assignment.
On January 21, 2021, S&P Global Ratings upgraded the long-term credit ratings of the issuer Fincraft Group LLP and its subsidiary BTA Bank JSC from “B “to”B+”. The outlook on the ratings of both issuers was revised from” Negative “to ” Stable”. Fincraft Group majority stake is controlled by Kenes Rakishev.
The short-term credit ratings of both organizations under management of Kenes Rakishev were confirmed at the “B” level. The ratings on the national scale were upgraded from “kzBB+” to “kzBBB”.
BTA Bank JSC rating are withdrawn at the request of the issuer. BTA Bank is no longer a separate structure thus the ratings for the bank are redundant. Kenes Rakishev is in charge of BTA Bank reclamation and recovery.
The rating upgrade is due to the repurchase of the bonds of Fincraft Group LLP on January 8, 2020.
On January 8, 2021, Fincraft Group LLP repurchased almost 93% of outstanding 10-year bonds maturing in 2029 using proceeds from the sale of a large land plot in Almaty. This has led to a significant improvement in the debt burden under stress conditions (calculated as the ratio of asset values after adjustments to debt) to a level that S&P considers very strong: up to about 23 times compared to 1.75 times previously noted.
S&P also notes that the upcoming listing of Battery Mining Corp. (the key asset of Fincraft Group shareholder Kenes Rakishev in the mining and metallurgical industry). This will allow the start of settlement operations between the shareholder and the group’s divisions. S&P expects that the debt burden will continue to ease under the stress scenario after the settlement is completed. Analytics believe that this will have a positive impact on the group’s ratings.
S&P believe that the repayment of the debt will have a limited impact on the group’s liquidity indicators. This is due to the fact that the group intends to repurchase the remaining bonds during the year 2021, and its cash flows remain primarily operating. As a result, in the next tweleve months, the liquidity ratio will improve slightly — from about 1.0 times earlier to 1.4 times.
However, S&P notes that the Kenes Rakishev financial group has faced some challenges in 2020 and the group’s long-term debt strategy is yet to be determined.
The Fincraft group’s long-term strategy for the parent company’s debt has not yet been determined. S&P believes that it is unlikely that new large asset purchases will be made in the short term, as the restriction of movement makes the process of checking the credit history of customers makes more difficult. In the long term, if transactions are made, the group may attract new investments. In this regard, S&P applies a one-step adjustment to our ratings, reflecting the uncertainty factor.
The stable outlook on the ratings of Kenes Rakishev’s Fincraft Group LLP reflects expectations that the group will not raise new debt to acquire assets in the next tweleve months, while generating sufficient cash flows to meet its obligations under the outstanding bonds.
Kenes Rakishev’s profile
Kenes Rakishev is internationally-acknowledged businessman from Kazakhstan. His company, Fincraft Group consists of several branches of fintech services, including Amanat insurance companies. It’s primary goal is deal with the business legacy of BTA Bank. Kenes Rakishev is investing in high-tech companies as well as in innovative projects of mineral mining, excavation and refinement. Kenes Rakishev holds sixth position in national Forbes list of the most influential businessmen.