KAZMUNAIGAS IPO: $6.5 BLN

FT - Kazakhstan's state-run oil and gas company KazMunaiGas is finalising plans for an initial public offering that could raise as much as $6.5bn, in what could be central Asia's largest ever stock market listing.

Bankers are in Kazakhstan this week pitching for work on the IPO, which will value the company at between $25bn and $26bn and seek to list 20-25 per cent of its shares, two people with knowledge of the plans told the FT.

The country plans to list the company on the London Stock Exchange and a local bourse, either in Almaty or Astana, but the people cautioned that the process was slow moving and a listing could be in late 2019.

KazMunaiGas (KMG), which produced almost 500,000 barrels per day of oil equivalent last year, is the biggest prize for investors in the former Soviet republic's state-owned corporate assets.

Its reserves stand at 683m tonnes of oil (approximately 5bn barrels) and it has a 17 per cent stake in the giant Kashagan oilfield. The company reported earnings before interest tax, depreciation and amortisation of $3.7bn in 2017 on revenues of $14.75bn.

A listing of KMG would be a big endorsement of Astana's long-delayed privatisation programme that also includes its uranium telecom monopoly and railway operator. It comes as the price of crude oil hovers around $75 a barrel, up from $48 two years ago.

Earlier this month, Kazatomprom, the world's largest producer of uranium, said it would list as much as 25 per cent of its equity in London and the Kazakh capital Astana in the form of global depositary receipts. This dual listing is part of a plan to develop the country's domestic equity market.

"There is no rush but they are serious about it," one of the people told the FT.

KMG's biggest shareholder is Samruk-Kazyna, Kazakhstan's sovereign wealth fund. It controls 90 per cent of the company with the remainder owned by the National Bank of Kazakhstan.

The company has strong ties with Vitol, the world's largest independent energy trader, which has extended the company billions of dollars in cash-for-crude loans. It also operates the largest crude oil pipeline network of 7,585km, as well as four big refineries in the country.

Outside of Kazakhstan, Central Asia's biggest economy, KMG runs 900 filing stations across eastern Europe under the Rompetrol brand.

At a recent investor forum in London, Samruk flagged mid-to-late 2019 as a window for the privatisation of KMG. The state-owned oil and gas group cleared the way for a float earlier this year with the delisting of its London subsidiary KMG Exploration.

KMG did not respond to a request for comment. Samruk was not immediately available to comment.

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Earlier:

2015, August, 2, 18:00:00 KAZAKHSTAN SELLS KMG The transaction is ostensibly intended to help energy company KazMunayGaz (KMG) reduce its $20 billion debt portfolio, which has been exacerbated by low oil prices.

2014, July, 28, 17:45:00 KMG WANTS TO TAKE KazMunaiGas Seeks to Take Exploration Subsidiary Private KMG Officials Have Been Looking to Reintegrate the Subsidiary for Years