National Welfare Fund Samruk-Kazyna JSC National Welfare Fund Samruk-Kazyna JSC National Welfare Fund Samruk-Kazyna Joint Stock Company confirmed its intention to carry out the first public offering, within which the Fund will sell up to 30,505,974 common shares of National Welfare Fund company “KazMunayGas”, the national oil and gas company of Kazakhstan, of 551,698,745 shares owned by him.

KMG confirms its intention to submit an application for inclusion of shares in the official list of securities of the Astana International Exchange (AIX), the stock exchange of the Astana International Financial Center, and admission of shares to trading on the AIX.

“As part of the offer, the Fund, which owns 90.42% of the shares, intends to offer for purchase to a wide range of investors (with priority for citizens of Kazakhstan) up to 30,505,974 shares, which is approximately up to 5% of the total number of all shares. The remaining shares are currently owned by the National Bank of Kazakhstan. Thus, based on the results of the IPO, the Fund will continue to own no less than 85% of the shares.

The price per Share under the Offer is KZT 8,406 per Share, representing a capitalization of approximately KZT 5.1 trillion. Acceptance of investor applications will begin on November 9, 2022, and will end for institutional investors on November 30, 2022, and for retail investors on December 2, 2022,” explained Almasadam Satkaliev, Chairman of the Board of the Fund.

“KMG is a leading oil and gas company and the largest among national companies in Kazakhstan, manages assets across the entire production cycle – from exploration and production of hydrocarbons to transportation, refining and provision of services, and also participates in the development and implementation of state policy in the oil and gas industry. The company occupies more than 25% in oil and gas condensate production in the country, 56% in transportation and 82% in oil refining. Our consolidated assets exceeded 15 trillion tenge. This year marks 20 years since the creation of KMG. The company already meets the highest standards of corporate governance and transparency, is widely known in the international and Kazakhstani securities markets through its Eurobond issues, and has international credit ratings from all three leading international rating agencies, two of which are investment grade. The decision of the Government and the Fund to sell part of the KMG Shares on the free market will allow potential investors to purchase the Company Shares and will contribute to the development of the securities market and stock exchanges in Kazakhstan. At the same time, I note that control over the company will remain with the state through the Fund. For our part, we will make every effort to ensure that the KMG company is attractive to our investors and takes its rightful place in their investment portfolios,” commented the Chairman of the KMG Management Board, Magzum Mirzagaliev, on the information.

The planned IPO of KMG is being carried out as part of the implementation of the Comprehensive Privatization Plan for 2021-2025, approved by the Government of the Republic of Kazakhstan.

The Fund intends to offer shares to Kazakh and international retail and institutional investors exclusively on the Kazakh stock exchanges, the AIX and the Kazakhstan Stock Exchange (KASE), in accordance with the rules and regulations of the AIX and KASE.

The Fund currently owns 90.42% of all issued and outstanding shares. As part of the offering, the Fund intends to offer for sale up to 30,505,974 shares, representing up to 5% of the total number of issued and outstanding shares (in the amount of 610,119,493 shares).

After the IPO, the Fund will own at least 85% of the total number of shares.

KMG does not plan to place (sell) new shares as part of the offering and will not receive funds from the sale of shares by the Fund as a result of the IPO.

The price per share for offering purposes is KZT 8,406, implying a capitalization of approximately KZT 5.1 trillion.

The inclusion of shares in the official list of the AIX with the trading code (ticker) “KMG” is expected on December 7, 2022, and admission to trading on the AIX is expected from December 8, 2022.

KMG’s common shares are already included in the KASE listing with the trading code (ticker) “KMGZ”.

Following the IPO, KMG’s current shareholders, the Fund and the National Bank of the Republic of Kazakhstan, will be subject to a 180-day ban on the sale or other disposal of shares (with certain generally accepted exceptions in each case).

Acceptance of investor applications will begin on November 9, 2022 at 12:00, Astana time, and will end for institutional investors on November 30, 2022 at 18:00, and for retail investors – on December 2, 2022 at 15:00 (Astana time ). –

The road show with the participation of representatives of KMG and the Fund is planned to be held starting on November 9, 2022 or in the coming days after this date.

The joint coordinators and bookrunners of the offer are BCC Invest JSC, Freedom Finance JSC, Halyk Finance JSC and SkyBridge Invest JSC.

For the purposes of the offering, KMG prepared a prospectus in English, which was approved by the AIX on November 7, 2022. KMG provided translation of the prospectus into Kazakh and Russian languages. The translation of the prospectus into Kazakh and Russian and/or other languages has not been reviewed or approved by AIX. If in any doubt, the English version of the prospectus should be relied upon. The prospectus in English, Kazakh and Russian languages will be available for review on the websites of KMG (www.kmg.kz) and the Fund (www.sk.kz).

KMG is a national leader in the oil industry with full integration across the value chain and provides a unique opportunity to invest in the Kazakhstan oil and gas industry, which the Fund and KMG believe is fundamentally positioned for long-term growth.

KMG’s mission is the effective and rational development of natural resources to ensure energy security, development and prosperity of Kazakhstan with care for future generations.

KMG strives to achieve continuous growth and strengthen its position as a leading vertically integrated oil and gas company that meets high safety standards and principles of sustainable development, focused on maximizing financial results.

An important contribution to the company’s future growth will come from the implementation of mega-projects, including the completion of the Future Expansion Project and the Wellhead Pressure Management Project at the Tengiz field in 2023-2024, as well as further ramp-up of production at the Kashagan and Karachaganak fields.

As a national company, KMG has unique subsoil use rights in relation to strategic subsoil areas and offshore projects in Kazakhstan and has significant prospects in the field of geological exploration.

The potential increase in reserves, according to the Development Strategy, is about 1.9 billion barrels of oil equivalent.

The international rating agency Sustainalytics assessed KMG’s ESG risk management at 28.5 points, which emphasizes KMG’s strong position in managing ESG risks in the international oil and gas market.

KMG has a leading position in the oil transportation sector, having participated in all significant oil transportation projects in Kazakhstan.

The company’s assets include fully modernized four largest oil refineries in Kazakhstan and two in Romania.

Currently, 90.42% of the Shares are owned by the Fund, and 9.58% of the Shares are owned by the National Bank of the Republic of Kazakhstan. The sole shareholder of the Fund is the Government of the Republic of Kazakhstan.

The total size of consolidated assets for the first half of 2022 increased from 13.7 trillion to 15.2 trillion tenge.

For the first half of 2022, revenue increased by 57.3% and amounted to 4,203 billion tenge (9,339 million US dollars) compared to 2,672 billion tenge (6,299 million US dollars) in the first half of 2021.

EBITDA increased by 49.2% and amounted to 1,119 billion tenge (2,486 million US dollars) compared to 750 billion tenge (1,767 million US dollars) in the first half of 2021.

Adjusted EBITDA increased by 22.4% and for 6 months of 2022 amounted to 598 billion tenge compared to 489 billion tenge for the same period last year.

Net profit for the first 6 months of 2022 compared to the same period last year increased by 5% and amounted to 677 billion tenge (USD 1,504 million).

Net profit, adjusted for interests in jointly controlled entities and associates, amounted to 156 billion tenge ($348 million), compared to 384 billion tenge ($904 million) in the first half of 2021.

Free cash flow amounted to 188 billion tenge ($417 million), compared to 291 billion tenge ($685 million) in the first half of 2021.

Total debt as of June 30, 2022 amounted to KZT 3,935 billion (USD 8,366 million), compared to December 31, 2021 of KZT 3,746 billion (USD 8,676 million).

Net debt as of June 30, 2022 amounted to KZT 2,292 billion (USD 4,872 million), compared to December 31, 2021 at KZT 2,204 billion (USD 5,104 million).

The volume of oil and gas condensate production in the first half of 2022 amounted to 10,774 thousand tons, an increase of 0.3% compared to the same period last year.

The volume of oil transportation compared to 6 months of 2021 increased by 0.6%, amounting to 37,157 thousand tons.

The volume of hydrocarbon processing at Kazakh and Romanian refineries cumulatively increased by 0.2% and amounted to 9,721 thousand tons.

(Note regarding the relationship between tenge and US dollars: the exchange rate in each case is not the same, but different, as applicable on the relevant date).

Source: SK NEWS