Kazakhstan seeks to put major state companies on global IPO
Kazakhstan plans to put the largest state companies on the global IPO, the chief financial officer and board member of the Kazakh National Welfare Fund, Samruk-Kazyna, Nurlan Rakhmetov told Trend Agency on April 10.
"The fund's companies (KazMunaiGas, Kazatomprom, Kazakhstan Temir Joly and others) will be definitely put on the global IPO in the future. This is even reflected in the fund's strategy," Rakhmetov said.
He recalled that the fund's companies have a very large investment portfolio in the amount of $139 billion and it is planned to attract some part of this amount through privatization.
"We will try to attract the significant part of the investments from strategic investors. We will implement many projects by attracting strategic investors and transnational companies, so that they would help us not only with money, but also with the transfer of technologies. But even if we attract some 30 percent of this amount through IPO, we will not able to find this significant amount of money within Kazakhstan. Therefore, we will have to enter the international capital market. The domestic market will not be able to meet our demands regarding the attraction of funding though this instrument," Rakhmetov said.
Currently, Kazakhstan is preparing for the second wave of privatization, according to the chief financial officer of Samruk Kazyna.
"A large privatization program is worked out by the government under the president's instruction. We are completing the work on formation of the list of companies for privatization for the three-year period (2014-2016)," Rakhmetov said.
The Chairman of the Board of Samruk Kazyna, Umirzak Shukeyev is expected to speak at the government on April 14 to present the privatization concept and the preliminary list of companies for privatization, the representative of Samruk Kazyna said. The concept will be worked out jointly with the government and afterwards, the fund will work out the privatization program within a month.
"I believe, this program will be approved by mid-May and its implementation will begin in 2014," Rakhmetov said.
The program will determine the list of companies for privatization and the method of privatization for each company (full privatization, partial privatization, IPO, auction or attraction of a strategic investor), the timeframe and presale events.
Rakhmetov said, the Samruk Kazyna Fund will offer at least 90 companies and the capital of these companies (at least 600 billion tenge as of early 2014, or about $4 billion at the old exchange rate) intended for the sale, for privatization.
The exchange rate of tenge was around 155 tenge per dollar as of early 2014. The exchange rate of tenge has dropped by almost 20 percent as a result of the devaluation in February and currently, it is equal to 182.07 tenge /$1.
The fund's representative recalled that the preparation of any company for any type of privatization takes significant amount of time.
"Therefore, it is unlikely that many companies will go for privatization in 2014. However, given that our shareholder is the state, everything depends on the government's decision," Rakhmetov said.
Additionally, Rakhmetov recalled that Samruk-Kazyna Group of Companies continues to implement the program for restructuring of non-core assets, that's to say, those which are by no means related to the company's activity - hotels, kindergartens, cultural centers, etc.
"We have sold the significant part of facilities in 2013 in this part. But we have something left for 2014 and 2015. We will continue this work in this part," Rakhmetov said.
The National Welfare Fund Samruk-Kazyna was established in line with Kazakh president's decree dated 2008 to enhance the competitiveness and sustainability of the national economy. The fund brings together nearly all public assets of Kazakhstan and manages these assets on behalf of Kazakh government. These assets include the JSC NC KazMunaiGas, Kazakhstan Railways JSC (Kazakhstan Temir Zholy), Kazakhstan Electricity Grid Operating Company JSC (KEGOC), Kazakhtelecom JSC and Kazakh National Atomic Company Kazatomprom.