Kazakh govt seeks waivers before Alliance bank deal

ALMATY, March 2 (Reuters) - The government of Kazakhstan will formally take control of Alliance ALLBq.L, the country's fourth biggest bank, after it secures covenant waivers from creditors, Alliance's chairman, Margulan Seisembayev, said on Monday.

SAFC, the majority shareholder of Alliance, said last month it would sell the government a 76 percent stake in the bank for less than one dollar because it would not be able to maintain the bank's stability and capitalisation in the long run.

But the government's takeover of another large bank BTA BTAS.KZ has prompted at least one BTA creditor to demand early debt repayment citing a change-of-control covenant in the loan agreement.

BTA is now in talks with other creditors to prevent massive early repayment demands and Seisembayev said the government wanted to avoid the same problems with Alliance.

"(The deal) will not be finalised until we get waivers from all investors," he said.

Kazakh banks have been hit hard by the global financial crisis after years of rapid growth fuelled by foreign borrowing. The government has allocated about $5 billion to help them via capital injections. (Writing by Olzhas Auyezov; Editing by Greg Mahlich)