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Kazakhstan to Sell Citizens 5-10% of Shares in ‘People’s IPOs’

Kazakhstan plans to sell 5 percent to 10 percent of the shares in major state-owned companies to its citizens through “people’s IPOs” that will start in October, said Economic Development and Trade Minister Kairat Kelimbetov.

The initial public offerings will stretch through 2013, followed by international share sales that will raise “billions of dollars,” Kelimbetov said today in an interview at the World Economic Forum on Europe and Central Asia in Vienna. The government hasn’t decided whether to include energy producer KazMunaiGaz National Co. in the sales, he said.

“I think there will be a big discussion” about this, Kelimbetov said.

President Nursultan Nazarbayev in February ordered state companies to sell stock to citizens before elections that extended his rule into a third decade. Exxon Mobil Corp., Royal Dutch Shell Plc and China National Petroleum Corp. are among companies that have invested $120 billion in Central Asia’s top energy producer and the world’s biggest uranium producer.

KazMunaiGaz’s London-listed unit, KazMunaiGas Exploration Production, is expected to be included in the citizen share sales, along with Kazakhstan Electricity Grid Operating Co., postal company JSC Kazpost and AO Kazakhstan Temir Zholy National Co., the state-railroad monopoly, Kelimbetov said.

The first share sale to foreigners in the strategic oil, gas and uranium industries will take place “in three years’ time,” Kelimbetov said.

The people’s IPOs will raise “hundreds of millions of dollars,” Kelimbetov said. “But the next stage, when we will really sell these shares of the big industrial companies, we will talk about billions of dollars, and this will be the very serious IPO program in the future.”

Kazakhstan holds about 3 percent of the world’s oil reserves, according to BP Plc.

The country increased its economic growth forecast to 7 percent this year and 6.9 percent in 2012 after gross domestic product expanded 7 percent in 2010, Kelimbetov said May 10. Growth will average 7 percent through 2015, he said.

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