Kazakhmys finances the government in exchange for its own state owned block of shares

/Almaty office of REUTERS, Nov.09, 99, Corr. Raushan Nurshaeva/ - The government of Kazakhstan relies on $100 million loan of Kazakhmys copper corporation in exchange for passing under the control of the corporation its 35 percent state owned block of shares for three years, is said in the resolution of the government. "The government of Kazakhstan enacts to agree with the offer of OJSC "Corporation Kazakhmys" about granting $100 million loan to the government of Kazakhstan and transfer of 35 percent of state owned blocks of shares into confidential management of the president of Kazakhmys for three years", - quoted the resolution of the government the employee of a public relations department of the prime minister to REUTERS. The loan will be given to the government facing problems with balancing the budget for next three years. The schedule of payments is as follows - $70 million till the end of this year and $30 million in the first quarter of 2000. Kazakhmys will begin to manage the state owned block of shares from June 8, 2000. The Ministry of Finance is commissioned to conclude a loan agreement and contract on confidential management with state owned blocks of shares with the company. It is said in the decree of the government that interest of the loan will be equal to LIBOR + 0.5 APR paid semiannually. It is supposed, that in three years, when term of the loan expires, the government will sell state owned block of shares of the corporation at open tender with the help of financial adviser coordinated with Kazakhmys. The press-secretary of the corporation Vladislav Nikolaev has informed REUTERS that special meeting of Kazakhmys shareholders, which will examine the question on granting a loan to the government, is scheduled on December 9. Nikolaev has reminded currently 35 percent state owned block of shares is under the management of the main shareholder of Kazakhmys - South Korean Samsung, however, five year term of its management expires in June, 2000. Samsung has bought 40 percent of Kazakhmys shares from Kazakhstan in 1996. "Samsung, with its 40 percents, as the biggest shareholder, will have a strong influence on development strategy of the corporation. For the period of management with shares the corporation Kazakhmys will grant the state, without any damage, for major investment plans $100 million loan with interest payments and full repayment of the principal", - has said Nikolaev. Earlier, the government intended to place state owned blocks of shares of the biggest metallurgical and petroleum enterprises on international stock markets, however, financial crisis has changed these plans a little. Recently, the government has declared that it will try to sell the shares of the biggest JSs to strategic investors till the end of the year. According to public relations department of Kazakhmys, authorized capital of the company is formed the following way - 40 percent belongs to Samsung, 35 percent belongs to the state, 20 percent of common and preferred shares are in hands of private persons and legal entities, 5 percent belongs to investment privatization funds. This year Kazakhmys plans to produce 360,000 tons of refined copper.