Air Astana, Kazatomprom and KazMunayGaz to kick off Kazakh privatisation programme

Kazakh privatisation programme: A significant proportion of the Kazakh government’s stakes in KazMunayGas, Air Astana and Kazakhtelecom  operator are to be sold off  over the next 18 months after a government commission  gave its approval to  plans drawn up last year by the  Samruk Kazyna Sovereign Wealth Fund to privatise a total of 153 companies through a series initial public offerings (IPOs), the fund’s CEO  Umirzak Shukeyev announced earlier this week.

A partial privatisation of the Kazatomprom nuclear power company is also on the schedule, while the Kazakhstan Temir Zholy  rail operator will not be put for sale until at least 2020 “only after its financial recovery.” 
The companies, which include 20 of 65 major  and 133 second-tier enterprises,  will be  listed on the London and Hong Stock exchanges as well as on the Astana International Financial Centre.
The  proposal to privatise up to 65 companies between 2016 and 2020 was first tabled in October last year, but subsequently stalled, partly because of  the country’s sustained financial downturn, but also after institutional investors warned that they could shun the program unless the government in Astana reconsidered KazMunaygaz’s plans to buy out minority shareholders in its UK KMGEP  subsidiary at a price equivalent to the cash on its balance sheet. KMG EP’s  independent directors claimed  that the move would “severely undermine the corporate governance of the company” and that the offer price “significantly undervalued” the company.  The holding company’s proposal (including a 14% increase on the original offer ) was rejected at an EGM held in August.
Regardless of this stand-off and the warning from institutional investors, the government commission has now given Samruk  Kazyna the green light to proceed with the programme which looks likely to unfold like this:

Air AstanaQ4 2017 – Q1 2018
KazatompromQ2 2018
KazMunayGazQ4 2018
KazakhtelecomQ4 2018
Kazakhstan Temir Zholy2019 
Qazaq AirTBC

The programme has the full backing of President Nursultan Nazarbayev who held meetings with executives from several  private equity firms including KKR, the Carlyle Group, Blackstone Group, and TPG when he visited the US in November 2015.