Kazakh Sovereign Fund Sees No `Sacred Cows' for Privatization

  • Samruk-Kazyna fund seeks to sell stakes in 43 large companies
  • Government will make stake purchases easier, deputy CEO says

Kazakhstan’s sovereign wealth fund Samruk-Kazyna is keeping no “sacred cows” as it prepares to sell stakes in 43 large units including energy companies, its deputy head said.

The fund may offer shares in shipping company KazMorTransFlot and is examining the possible sale of stakes in the downstream business of KazMunaiGaz National Co., which may include Kazakhstan-based refineries and Rompetrol, Deputy Chief Executive Officer Dauren Erdebay said in an interview Thursday.

“Besides the pre-sale preparation of a company, the government will do a lot of work in terms of sector regulation, taking into account our task to have an environment where buyers will be able to continue effective ownership,” he said.

Central Asia’s biggest energy producer wants to sell stakes in companies owned by state development holding Baiterek, agriculture holding KazAgro and Samruk-Kazyna. It faces what President Nursultan Nazarbayev called a “real crisis” after oil prices fell by half and the tenge plunged against the dollar in an August free-float. Kazakhstan set the currency free under the pressure of devaluations in Russia and China, its neighbors and main trading partners.

Samruk-Kazyna will make a presentation on the “key parameters of privatization” during a visit by Nazarbayev to the U.K. next week, and will outline the situation in the oil and gas, railway and energy sectors so that potential investors understand where the opportunities are, Erdebay said. It will also seek to create a Kazakh-British business council for investors, who are already showing interest in oil services, infrastructure and the food industry, he said.

The state may sell shares in uranium producer Kazatomprom, railway monopoly Kazakhstan Temir Zholy, and KazMunaiGaz National Co. “as soon as they ready,” Erdebay said. The floats could be coordinated with the creation of a financial center in the Kazakh capital, Astana, due for 2017 at the earliest, he said.

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