KTZ debt nears 4 trillion tenge, breaches HSBC covenant limit

September 14, 2026 at 03:15 PM2 min

This digest was compiled by AI from multiple sources — links to the originals are below.

Kazakhstan Temir Zholy's total debt rose 22% since the start of the year to 3.9 trillion tenge, exceeding the maximum leverage ratio allowed under its HSBC loan covenants. The company's leverage ratio reached 1.18 against a permitted 1.15, but HSBC agreed to waive the breach until November 30, 2026. KTZ's capital expenditure nearly doubled to 700.7 billion tenge in the first half, even as its net profit rose 2.2 times to 191 billion tenge on currency gains.

Key Facts

KTZ's total debt reached 3.9 trillion tenge as of June 30, 2026, up 22% from the start of the year.
The company's leverage ratio hit 1.18, exceeding the maximum 1.15 allowed under HSBC loan covenants.
HSBC agreed to waive the covenant breach until November 30, 2026.
KTZ's capital expenditure nearly doubled to 700.7 billion tenge in the first half of 2026.
Net profit rose 2.2 times to 191 billion tenge, driven by a 99.7 billion tenge foreign exchange gain.

Debt and Covenant Breach

KTZ's total debt and issued debt securities grew 22% from the start of the year to 3.9 trillion tenge, according to the company's half-year report published on AIX. The leverage ratio reached 1.18, above the maximum allowed 1.15 under HSBC loan terms. HSBC agreed to temporarily disregard the breach until November 30, 2026. KTZ management forecasts that by December 31, 2026, the ratio may be close to the threshold or possibly not met. Without bank consent, a covenant breach could allow creditors to demand early repayment of the loans.

Investment and Financial Results

KTZ attracted an additional 1.09 trillion tenge in the first six months of 2026. Financing service costs rose 38% to 164.9 billion tenge. Capital expenditure nearly doubled to 700.7 billion tenge, directed at new railway lines, track repairs, and purchase of locomotives and wagons. Net profit increased 2.2 times to 191 billion tenge, including a 99.7 billion tenge foreign exchange gain compared to a 77 billion tenge loss a year earlier. Excluding currency effects, pre-tax profit remained almost unchanged at about 200 billion tenge.

Liquidity and Mitigation Plans

KTZ's short-term liabilities exceed current assets by 923.2 billion tenge. The company must repay 562 billion tenge of loans within the next year. KTZ is considering an IPO and converting part of Samruk-Kazyna fund bonds into perpetual securities to reduce debt. Unused credit lines total 387.6 billion tenge.