IPO Plans of JSC NC “KazMunayGas” Discussed Online

Representatives of Samruk-Kazyna JSC, JSC NC “KazMunayGas” (KMG), the stock market and experts have discussed the future IPO of KMG during the first open online meeting at the Fund’s platform.

The IPO of the country’s largest oil and gas company is planned for this year. The offering will be made on the KASE and AIX stock exchanges.

One of the Samruk-Kazyna Fund’s strategic and priority activities is privatisation of assets and, in particular, the IPOs of the largest portfolio companies.

“Privatisation pursues several goals at once. These include creation of a long-term market value of the Fund’s and the portfolio companies’ assets, improvement of corporate governance standards and operational efficiency, emergence of new sources of funding for the development of the companies, replenishment of the RoK National Fund,” Yernar Zhanadil, Managing Director of Samruk-Kazyna, said.

The shares will be offered in compliance with the national legislation and the stock exchanges’ rules. The final decision on the sale of shares and the offering terms will be made by the Fund’s Board of Directors and the RoK Government. The decision will be based on the recommendations from a consortium of consultants, a preliminary assessment of potential demand and the market conditions. The price of shares will primarily depend on the structure of demand that will develop during the book-building process.

“The shares will be allocated after the book-building is completed, based on the recommendations from investment banks and discussions between KMG and the selling shareholders. In the allocation, priority will be given to retail investors, taking into account the balance of interests of all stakeholders. KMG and Samruk-Kazyna are interested in forming a high-quality and diversified investor base and are committed to a long-term presence on Kazakhstan’s fast-growing stock market,” Dauren Karabayev, Deputy Chairman of KMG’s Management Board, noted.

Dauren Karabayev also said, “The official channels for buying KMG’s shares will be published later, so be careful and do not trust fraudsters’ advertising before the bidding is announced on the official websites of the AIX and KASE stock exchanges, KMG and Samruk-Kazyna, and the authorised channels for the submission of bids are specified.”

During the discussion, the Fund’s representatives and the experts focused on specific issues related to possible risks to a successful IPO. One of such risks is the current situation with oil exports through the CPC pipeline. According to Dauren Karabayev, the company will take all necessary measures to minimise the negative consequences and is also ready to develop alternative transportation routes. Currently, the Atyrau–Samara alternative route as well as the routes to Alashankou and Aktau are available to KMG.

JSC NC “KazMunayGas” is the largest national oil and gas company. Its consolidated assets amounted to USD 31.6 billion by the end of 2021. Oil and gas condensate production is 21.7 million tons, which is about 25% of all production in Kazakhstan. At the end of Q1 2022, the KMG Group’s consolidated debt amounted to USD 8.3 billion, having almost halved over the past five years. EBITDA increased by 39.5% and amounted to USD 971 million in Q1 2022.

The focus on the extraction, refining, transportation and marketing of oil and petroleum products will be maintained, with the key focus remaining on exploration and production of hydrocarbons and provision of the domestic market with petroleum products. This year, KPI’s polypropylene plant will be launched. Preparations for the implementation of the polyethylene and butadiene projects are in progress. The company is committed to the highest ESG and sustainable development standards.