Kazakhstan Chamber of Commerce in the USA

KazCham



Evolution of role sees fund gearing up for ‘People’s IPO’ 0

Posted on December 25, 2011 by Alex

The heart of Kazakhstan’s economy, Samruk-Kazyna has, since its inception, played a crucial role in the country’s industry and economy. Now the fund is ready to float some  of its assets at discounted prices to retail investors. By Clare Nuttall

Kazakhstan’s sovereign wealth fund Samruk-Kazyna put to work billions of US dollars to support the economy during the global economic crisis. With Kazakhstan growing strongly, the fund’s role has evolved – it is now responsible for creating new industries and increasing efficiency in the economy’s most important companies.

This year will see further dramatic changes, as minority stakes in some of its largest and most attractive companies are floated on the domestic stock exchange. Samruk-Kazyna was created in the depths of the crisis through the merger of two existing organizations – holding company Samruk and investment company Kazyna – in October 2008, and its importance to the Kazakh economy cannot be overestimated. Its subsidiary companies include the national rail and postal companies, electricity grid operator Kegoc, state oil-and-gas giant National Company KazMunaiGas, nuclear company Kazatomprom, national air carrier Air Astana, and three of the top four banks. It is also the parent of the Damu small enterprise fund, private equity fund of funds Kazyna Capital Management, and other  financial organizations.

Overall, Samruk-Kazyna manages assets worth in excess of $70 billion, accounting for around 40 percent of the economic activity in the country. It has a total of 404 subsidiaries and affiliated companies. As of March 2010, Samruk-Kazyna announced it had invested KZT897 billion ($6.1 billion) from Kazakhstan’s National Fund to support the economy during the crisis. Its largest financial commitment was to the banking sector, where it invested some KZT486 billion.

Other anti-crisis measures included supporting the real-estate sector (KZT360 billion), support for small and medium-sized enterprises (KZT120 billion) and implementing industrial and infrastructure projects (KZT121.5 billion).

Samruk-Kazyna became the majority shareholder of  BTA Bank and Alliance Bank, injecting liquidity when both were on the brink of collapse in February 2009. Today, a debt restructuring for the two banks has been agreed with creditors.

At the same time, the fund took minority stakes in Kazakhstan’s other big-four banks, Halyk Bank and Kazkommertsbank. Now that GDP growth in Kazakhstan has returned to pre-crisis levels, Samruk-Kazyna is starting to divest some of the assets it acquired during the crisis. The fund has already exited its investment in Halyk, selling the stake back to the bank and its majority shareholder Almex.

Kazkommertsbank could buy back its shareholding in the near future. A sale of BTA to Russia’s Sberbank is still on the cards and Samruk-Kazyna is also looking at potential exit routes for Alliance, but it is adamant that it will sell its shareholdings only if the price is right.

Post crisis, Samruk-Kazyna is involved in raising the efficiency of its subsidiaries, and is the main conduit for big foreign investment projects. The emphasis within Kazakhstan has shifted toward production of processed and value-added products, rather than being purely a supplier of raw materials.

Several of the priority projects within the 2010-14 Accelerated Industrial and Innovative Development program are aimed at achieving this goal. Samruk-Kazyna is already working to diversify and industrialize Kazakhstan. The ‘breakthrough projects’ under the Samruk-Kazyna umbrella include reconstruction of the Atyrau refinery, modernization of the national electricity grid and construction of several new power stations. Within Samruk-Kazyna, two holding companies created in late 2008 are responsible for the chemicals and metals sectors, respectively. The United Chemicals Company was set up to develop a national chemicals industry and reduce Kazakhstan’s dependence on imports of products such as fertilizers. Tau Ken Samruk is the holding company for the Kazakh government’s stakes in metals and mining companies. While oil and gas still account for the lion’s share of Kazakhstan’s exports, metals and mining have been growing in importance in recent years.

Soaring metals prices, and the steady growth in demand from neighboring China in particular, have provided an impetus for Kazakhstan to increase its output. The government stakes in two major London Stock Exchange-listed mining companies – Eurasian Natural Resources Company (ENRC) and Kazakhmys – are held within Tau Ken Samruk. Both companies have an immense presence in the Kazakhstan mining sector, as well as internationally.

Kazakhmys is the largest copper producer in Kazakhstan and one of the top 10 producers worldwide. ENRC – a diversified natural resources group – has a presence in China, Russia, Brazil and Africa, as well as in Kazakhstan. This year has already seen significant changes for Samruk-Kazyna. On April 12, Timur Kulibayev was promoted to chairman as part of the post-elections reshuffle. Kulibayev, the son-in-law of Kazakh president Nursultan Nazarbayev, was previously the company’s deputy chairman.

The fund’s main task this year will be to carry out the ‘People’s IPO’ program, under which shares in companies that are wholly or partly owned by Samruk-Kazyna will be offered at a discount to retail investors and pension funds. In addition to raising funds for expansion, the program is also intended to stimulate the domestic capital market.

At least some of the IPOs are due to take place by the end of this year. Companies expected to be part of the first wave of IPOs include power-generation company Samruk-Energo, electricity grid operator Kegoc, postal service Kazpost and KazMunaiGas Exploration and Production. In the following two years, IPOs of other companies – including Kazatomprom, National Company KazMunaiGas, and railway operator Kazakhstan Temir Zholy – are planned.

SOURCE: Invest in Kazakhstan, 2011, p. 45-46

KazMunaiGaz to Borrow $2 Billion, Considers IPO 0

Posted on April 13, 2010 by KazCham

By Nariman Gizitdinov

April 9 (Bloomberg) — KazMunaiGaz National Co., a Kazakh state-owned energy company, is seeking to borrow as much as $2 billion this year and is considering a share sale within three years as it bids to join the world’s leading oil producers.

KazMunaiGaz plans to invest $4.3 billion this year in production, refining and pipelines, and refinance existing debt, Ardak Kassymbek, general manager for corporate strategy and asset management, said today in a phone interview from Astana.

The capital markets offer a “favorable situation” as KazMunaiGaz’s outstanding bonds trade at “very low rates,” Kassymbek said.

KazMunaiGaz, which accounts for about a quarter of Kazakhstan’s oil output, plans to become one of the world’s 30 biggest oil producers by 2015. The company aims to produce 25 million metric tons of oil by that time from 18.7 million tons last year. The central Asian nation holds 3.2 percent of the world’s oil reserves, according to BP Plc.

The borrowing would help cover $1.2 billion of spending planned this year for Kashagan, the country’s biggest oil field, Kassymbek said. Kazakhstan plans to boost oil output to 100 million tons by 2015 after bring the field online. KazMunaiGaz is equal partners in Kashagan with Eni SpA, Exxon Mobil Corp., Royal Dutch Shell Plc and Total SA, each holding 16.8 percent.

In the next five years, KazMunaiGaz plans to invest as much as $4 billion a year, including from $1.5 billion to $2.5 billion a year for the Kashagan development, Kassymbek said.     KazMunaiGaz also plans to invest $300 million at its Atyrau refinery and $200 million to upgrade Rompetrol, Kassymbek said.

Share Sale

Kazakhstan’s National Wellbeing Fund Samruk-Kazyna, which owns KazMunaiGaz for the state, has considered selling shares in the oil producer in the next two or three years, Kassymbek said.

“An IPO would be an optimal solution for the company to raise additional capital,” although requiring significant work, Kassymbek said.

KazMunaiGaz’s debt may increase to $15.2 billion this year from $14.5 billion last year, Kassymbek said. Earnings before interest, taxes, depreciation and amortization is set to advance about 44 percent to $6.2 billion this year, lowering the debt- to-Ebitda ratio to 2.5, he said.     “We plan to stick to a 2.5 ratio in the future,” Kassymbek said.

The yield on KazMunaiGaz’s $1.5 billion bonds due in 2015 rose 1 basis point to 4.855 percent, after having risen 3 basis points earlier in the day. A basis point is 0.01 percentage point.

To contact the reporter on this story: Nariman Gizitdinov in Almaty at ngizitdinov@bloomberg.net

Last Updated: April 9, 2010 11:07 EDT

SOURCE: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aZ3_oHhlOlg8

Investor Relations Manager needed in Kazakhstan 1

Posted on April 06, 2010 by KazCham

Upon request of our Partner, Antal Russia Executive Recruitment, we announce a job opportunity for an investor relations manager in Kazakhstan for a private equity company launching the IPO process.

Responsibilities

  • Reporting to the Shareholders and Senior Management of the Group you will be responsible for all aspects of Investor Relations area. Your main scope of responsibilities will include:
  • Acting as the major point of contact for the investment community;
  • Constant reporting to the management of the company with investor feedback and other IR issues;
  • Keeping the investors informed about the major news of the company;
  • Liaising with Corporate Finance executives, Sales teams and Analysts;
  • Providing investor presentation materials;
  • Working with shareholder analysts on targeting, and produce regular market reports.

Requirements

  • The Ideal Candidate must have the following skills and experience:
  • Knowledge of Capital Markets;
  • Knowledge of London Stock Exchange;
  • Proven track record in Investor Relations;
  • Excellent communication skills;
  • Fluent or native English;
  • Sound ability to write creatively both in English and Russian and / or Kazakh;
  • IPO experience is preferable;
  • Strong financial skills; MBA, CFA, ACCA or other professional qualifications are highly preferred;
  • Knowledge of production companies would be beneficial;
  • A good team-player with an ability to deliver high quality results under pressure and meet given deadlines;
  • Ability to work autonomously and able to manage multiple projects at one time.

Please note: In case you are coming from outside of Kazakhstan, you should be prepared to either relocate or to spend at least 2-3 weeks every month in Kazakhstan.

If you are interested, please, contact Natalia Kurkchi at Natalia.Kurkchi@antalrussia.com



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