Kcell JSC Intention to float

  Kcell JSC - Intention to float

RNS Number : 9655Q
Kcell JSC
13 November 2012
 



 

This announcement does not constitute  or form part of  any offer for sale  or 
subscription of or solicitation  to buy or subscribe  for any securities,  and 
neither this announcement nor  any part of  it shall form the  basis of or  be 
relied on  in connection  with  or act  as an  inducement  to enter  into  any 
contract or commitment whatsoever.

 

This announcement is an advertisement  and not a prospectus. Investors  should 
not purchase or subscribe for any transferable securities referred to in  this 
announcement except  on the  basis  of information  in  the prospectus  to  be 
published by Kcell Joint  Stock Company in due  course in connection with  the 
admission of its common  shares in the form  of global depositary receipts  to 
the official list of  the United Kingdom Listing  Authority and to trading  on 
London Stock Exchange plc's main market for listed securities.

 

 

For Immediate
Release                                                                                  
13 November 2012

 

 

Kcell announces intention to proceed with international offering in London and
                                    Almaty

 

Kcell Joint Stock Company ("Kcell" or the "Company"), the leading provider  of 
mobile telecommunications services in Kazakhstan  by market share in terms  of 
revenue and subscribers, today announces its intention to conduct an  offering 
(the "Global Offer") of its common shares (the "Shares") in the form of global
depositary receipts ("GDRs") and a concurrent offering (the "Domestic  Offer") 
in Kazakhstan in the form of Shares.  The Global Offer and the Domestic  Offer 
(together, the "Offering") will comprise the  sale of existing Shares held  by 
Sonera Holding B.V., a wholly owned subsidiary of TeliaSonera AB, in an amount
of up  to 25% of the Company's outstanding common shares.

 

 

The Global  Offer  and  the Domestic  Offer  are  subject to  receipt  of  all 
necessary regulatory approvals. Kcell is expected to make applications for the
admission of  the GDRs  to the  Official List  of the  United Kingdom  Listing 
Authority and to trading on the main regulated market for listed securities of
the London  Stock Exchange  plc. An  application  has also  been made  to  JSC 
"Kazakhstan Stock Exchange" (the "KASE") for the Shares to be admitted to  the 
first category of the official list of the KASE.

 

Credit Suisse,  UBS Investment  Bank and  Visor Capital  are acting  as  joint 
global coordinators and  joint bookrunners  of the  Global Offer.  Renaissance 
Capital is acting  as a  joint bookrunner  and Halyk  Finance is  acting as  a 
co-manager of the  Global Offer.   The Domestic Offer  is being  led by  Visor 
Capital.

 

Veysel Aral, Chief Executive Officer of Kcell, said:

"We  are   very  excited   to   be  listing   Kcell  both   domestically   and 
internationally. This is a significant  milestone for our company, which  over 
the past  fourteen years  has  led the  formation  and development  of  mobile 
telephony in Kazakhstan.

We expect that the IPO will help us to further strengthen our corporate  brand 
and business  reputation,  improve our  access  to the  international  capital 
markets and help us to grow our business further.

Kcell benefits from significant opportunities presented by the strong economic
growth in Kazakhstan leading  to a rapid improvement  in consumer demand,  our 
leading position in the mobile telecommunications market of Kazakhstan and our
close relationship with TeliaSonera AB, a global telecoms operator with proven
track record of sector expertise and operational excellence.

Kcell has demonstrated  strong potential for  cash generation through  revenue 
growth, high profitability and  a strong cash conversion  ratio.  We are  well 
positioned to  capture  growth  in  data services  and  achieve  further  cash 
generative growth by maintaining leadership  in existing services, as well  as 
providing subscribers with new data and value-added services".

 

 

Lars  Nyberg,  President  and  Chief  Executive  Officer  of  TeliaSonera  AB, 
commented:

"Kcell is an  important part  of our  global operations  and one  of the  most 
successful subsidiaries of TeliaSonera AB.

 

We are fully committed to Kcell, which will continue to benefit from using our
global brand  identity,  participating  in  international  roaming  and  joint 
technology initiatives, including  common procurement  across the  TeliaSonera 
group. We will work with Kcell  to ensure that it complies with  international 
best  practice  in  terms  of   corporate  governance  and  corporate   social 
responsibility as it makes the transition to a publicly listed company."

 

Company Overview

 

Kcell is  the  leading  provider  of  mobile  telecommunications  services  in 
Kazakhstan by  market  share in  terms  of  revenue and  subscribers.  It  has 
operated since 1998,  and as of  30 September 2012  it had approximately  12.7 
million subscribers, representing a market share of 47.7%, as estimated by the
Company. Its estimated market share in terms  of revenue was 57% for the  year 
ended 31 December 2011.

Kcell provides mobile voice telecommunications services, value-added  services 
such as  short  message services,  multimedia  messaging services  and  mobile 
content services,  as well  as  data transmission  services such  as  Internet 
access. It has  two brands: the  Kcell brand, which  is targeted primarily  at 
corporate subscribers (including government subscribers), and the Activ brand,
which is targeted at the mass market. The Company offers its services  through 
its extensive,  high quality  network which  covers substantially  all of  the 
populated territory of Kazakhstan.

 

For the year  ended 31  December 2011, the  Company generated  revenue of  KZT 
178,786 million (c.US$1,193.0  million[1]); EBITDA  for 2011  was KZT  105,794 
million (c.US$706.0 million), representing a  margin of 59.2%; and profit  for 
the year was  KZT 66,858  million (c.US$446.1  million). For  the nine  months 
ended 30 September 2012, the Company generated revenue of KZT 133,104  million 
(c.US$888.2 million); EBITDA for the period was KZT 74,503million  (c.US$497.2 
million), representing a  margin of 56.0%;  and profit for  the period of  KZT 
46,072 million (c.US$307.4 million). 

 

Kcell benefits  from  operating  in  the  fast  growing  emerging  economy  of 
Kazakhstan. In 2011 Kazakhstan's  real GDP growth was  7.5%, according to  the 
Economist Intelligence Unit (EIU).  Real GDP per capita has been growing at  a 
compound annual growth rate of 5.9%  to reach US$11,491 in 2011, according  to 
the EIU, while Kazakhstan's  unemployment rate declined from  6.6% in 2009  to 
5.4% in 2011. As at 31 December 2011, Kazakhstan had a positive trade  balance 
of US$47.3  billion  with  foreign  direct  investments  of  US$12.9  billion, 
according to the EIU.

 

The  Company  is  controlled  by  TeliaSonera  AB,  one  of  Europe's  largest 
telecommunication companies and a strong international telecoms operator  with 
many years of  successful experience  in managing mobile  telecoms across  the 
world and a track-record of  technical innovation and operational  excellence. 
Prior to the  Offering, TeliaSonera AB  held 49% of  Kcell directly and  37.9% 
indirectly through Fintur Holdings B.V. ("Fintur"), a company jointly owned by
TeliaSonera AB  and Turkcell  İletişim Hizmetleri  A.Ş, resulting  in a  total 
effective ownership  of  86.9%. Sonera  Holding  B.V., a  100%  subsidiary  of 
TeliaSonera AB, acquired its 49% holding from Kazakhtelecom JSC in 2012.

 

Kcell plans  to  benefit from  the  significant growth  potential  for  mobile 
content and data services  in Kazakhstan. The Company  intends to continue  to 
invest in the deployment of its 3G  network to expand coverage. Kcell aims  to 
maintain its market leadership in terms of revenue and subscribers by offering
its products and  services at  competitive prices, expanding  its offering  of 
products and  services,  maintaining  the  high quality  of  its  network  and 
enhancing its brand value.

 

 

For further information contact:

 

International Media

College Hill

Leonid Fink,  Tony  Friend, Kay  Larsen                                        
                            +44 207 457 2020

 

Kazakhstan Media

United Agencies

Olesya                                                             Beruashvili 
                                                                                            
+7 (727) 292 16 01

 

Swedish Media

TeliaSonera

Press
office                                                                                                       
+46 771 77 58 30

 

This press release does not constitute or form part of any offer or invitation
to sell, or any  solicitation of any  offer to purchase nor  shall it (or  any 
part of it) or the fact of its  distribution, form the basis of, or be  relied 
on in connection with, any contract therefore. The offer and the  distribution 
of this press release and other information in connection with the listing and
offer in certain jurisdictions may be restricted by law and persons into whose
possession any document or other  information referred to herein comes  should 
inform themselves  about and  observe  any such  restriction. Any  failure  to 
comply with these restrictions  may constitute a  violation of the  securities 
laws of any such jurisdiction.

This communication is only directed at (i) persons who are outside the  United 
Kingdom or (ii) investment professionals  falling within Article 19(5) of  the 
Financial Services and Markets Act 2000 (Financial Promotion) Order 2005  (the 
"Order") or (iii) high net  worth entities, and other  persons to whom it  may 
lawfully be communicated, falling within Article 49(2)(a) to (d) of the  Order 
or (iv)  other persons  to whom  it  may lawfully  be communicated  (all  such 
persons together  being  referred  to  as  "relevant  persons").  The  offered 
securities are only available  to, and any invitation,  offer or agreement  to 
subscribe, purchase or otherwise  acquire such securities  will be engaged  in 
only with, relevant persons.  Any person who is  not a relevant person  should 
not act or rely on this communication or any of its contents.

This press release  is not  an offer  to sell nor  a solicitation  to buy  any 
securities nor  a  prospectus for  the  purposes of  EU  Directive  2003/71/EC 
(together with any applicable implementing  measures in any Member State,  the 
"Prospectus  Directive")  as  may   be  amended  from   time  to  time.   This 
communication is only addressed  to qualified investors  in that Member  State 
within the meaning of the Prospectus Directive. A prospectus will be  prepared 
and made  available  in  accordance  with  the  Prospectus  Directive  if  any 
securities are issued and,  when published, will  be obtainable in  accordance 
with the Prospectus Directive. Investors should not subscribe for or  purchase 
any securities referred to in  this press release except  on the basis of  the 
information contained in the prospectus to be published by the Company in  due 
course relating to the securities. The expression "Prospectus Directive" means
Directive 2003/71/EC (and amendments thereto, including Directive  2010/73/EU, 
to the  extent implemented  in any  relevant Member  State) and  includes  any 
relevant implementing measure in the relevant Member State.

This press release may not be published, distributed or transmitted in or into
the United States. This press release does not constitute an offer to sell  or 
the solicitation  of an  offer to  buy the  securities discussed  herein.  The 
securities mentioned herein have not been,  and will not be, registered  under 
the United States Securities Act of 1933 (the "Securities Act") and may not be
offered or sold  in the  United States unless  they are  registered under  the 
Securities Act or pursuant to an exemption from registration. There will be no
public offering of the securities in the United States.

Certain statements included herein  may constitute forward-looking  statements 
that  involve  a  number  of   risks  and  uncertainties.  By  their   nature, 
forward-looking statements involve risks and uncertainties because they relate
to events and depend on circumstances that may or may not occur in the future.

 

 

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[1] The functional currency of  the Company is Kazakhstan Tenge.  Translations 
of Kazakhstan  Tenge  amounts into  U.S.  dollars  are given  solely  for  the 
convenience of the reader as at 30 September 2012 at the exchange rate of  KZT 
149.86 to one U.S. dollar, which was the official exchange rate quoted by  the 
National Bank of Kazakhstan on 30 September 2012.

                     This information is provided by RNS
           The company news service from the London Stock Exchange
 
END
 
 
NRADMMMMVFFGZZG -0- Nov/13/2012 07:01 GMT