Kazakhstan plans to sell state owned blocks of stocks of some major joint stock companies
/Almaty office of REUTERS, Sep.07, 99/ - Kazakhstan, which is having
difficulties with replenishment of its budget, intends to sell part of state
owned blocks in major metallurgical and oil companies and of joint stock
company Kazakhtelecom and People's bank to strategic investors.
Vice minister of finance of Kazakhstan, chairman of the committee for
privatization and state assets management Daniar Abulgazin said at the
press conference last week tender had been announced to select an advisor
on sale of state owned blocks of five major enterprises to strategic investors.
Investors will be offered:
- 30% of Mangistaumunaigaz oil company,
- 25.2% of Aktobemunaigaz oil company,
- 15.5% of Ust-Kamenogorsk titan-magnesium combine,
- 27.64% of Kazzinc,
- 35% of Kazakhmys copper corporation.
As Abulgazin says proposals from potential tender participants have been
already received, and they have to submit projects of their selling strategies
till September 20.
Earlier, these enterprises as potential "blue chips" were offered for tenders
to portfolio investors, but due to financial crisis on international stock
market selling strategies have been changed. Now the blocks will be offered to
Abulgazin said deal on selling part of state owned blocks in Tengizchevroil
joint stock company had not been made yet. At this moment only possibilities
of selling 40 percent of 25 percent state owned blocks, which is 10 percent of
total assets, in Tengizchevroil are considered.
Rumors on possible sale of state owned block of stocks in Tengizchevroil by
the government were accepted negatively in Kazakhstan. Many politicians
called government's policy short sighted, which attempts to find money
through privatization and exports. Value of state owned block of stocks is
estimated at $1.0-1.5 billion, and it could double next year.
"As far as advisors concerned, several requests were sent to oil companies.
This is a normal process to attract investors' attention to Kazakhstan", said
As he says, government made a decision to sell part of state owned block of
stocks of People's savings bank, thereof government's share will be reduced
down to 50 percent plus one stock of 80 percent of shares.
Sale of state owned block of stocks will be carried out in two ways. First of
all, by issuing additional shares which will be directed to increase bank's
owners' equity. Second part of state owned block of shares will be sold to an
investor, and money received from this deal will be sent to the budget.
Abulgazin did not mention proportions of People's bank's shares to be sold,
and did not specify whether an investor will be domestic or foreign. Vice
minister also said government hoped to sell 15 percent of state owned block
of stocks of Kazakhtelecom this year. Moreover, Kazkommertsbank wants to
sell its share - 30 percent of Kazakhtelecom.
"Talks with European Bank for Reconstruction and Development is held at
this time, which is looking for a strategic investor, and we have some certain
proposals already. However, these shares will be sold on a mandatory return
basis, where an investor should return them if he does not fulfill his
obligations", said Abulgazin.
The government also works on sale terms of state owned blocks of stocks of
additional 218 less attractive to investors companies whose privatization to
be completed by the end of 2000.
Abulgazin informed republican budget received 29 billion tenge from
privatization during eight months of this year, which is 49.6 percent of 58
billion tenge planned for this year.
Dividends on state owned blocks of stocks have made about 1 billion tenge
during seven months of this year or 82 percent of planned amount in 1999.