Tag Archives: business

Skyland says finds gas in Georgia

JULY 8 2016 (The Conway Bulletin) — Australia’s Skyland Petroleum said it started production at Block XIG, a gas field 10km south of Tbilisi. Skyland owns 20% of the project, Georgia Oil and Gas (GOG) owns 60% and state-owned Georgian Oil and Gas holds the rest. Last month, Skyland said it started operations at its first well at the Kyzyl-Tumshuk oil and gas field in southern Tajikistan.

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(News report from Issue No. 289, published on July 15 2016)

Kalashnikov opens store in Georgian capital

TBILISI, JULY 11 2016 (The Conway Bulletin) — Russian arms manufacturer Kalashnikov has opened its first shop outside Russia in a Tbilisi shopping mall, selling guns and accessories from both the Kalashnikov range and the Baikal hunting range.

Kalashnikov, which is 51% owned by Rostec, a Russian defence sector state holding, had not sold civilian firearms to Georgia in a decade, the company said.

“In the next five years, we are looking to boost deliveries of civil arms to Georgia,” Kalashnikov’s marketing director, Vladimir Dmitriyev said in a press release.

Relations between Russia and Georgia have slowly improved since former President Mikheil Saakashvili lost power in 2013 and the new government moved towards reconciliation after a war in 2008 exacerbated tensions in the breakaway regions of South Ossetia and Abkhazia.

The new store said it will sell hunting and sports arms. The company is looking to brush off the old Soviet-era heritage and build a more modern, branded look. Last year, it opened 20 new shops across Russia and plans to enter Kazakhstan in 2017. Kalashnikov is one of Russia’s most recognisable brands.

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(News report from Issue No. 289, published on July 15 2016)

ADB agrees $750m loan to update Azeri power

JULY 12 2016 (The Conway Bulletin) — The Asian Development Bank (ADB) said it will lend $750m to Azerbaijan to co-fund improvements to the country’s outdated regional power distribution systems.

The project, worth around $1b, aims to refurbish the distribution network and the efficiency of Azerishiq (Azerlight), the state-owned power distribution company.

Azerbaijan’s government will invest the remaining $250m. The ADB said that it will send its $750m loan in three tranches of $250m.

“This ADB program will help address the bottleneck in electricity supply and provide round-the-clock and reliable electricity to households and entities in secondary cities and rural areas in Azerbaijan,” Sean O’Sullivan, director general in ADB’s Central Asia Department, said.

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(News report from Issue No. 289, published on July 15 2016)

HM to open store in Kazakhstan

JULY 13 2016 (The Conway Bulletin) — Swedish fashion retailer H&M said it will open its first store in Kazakhstan in 2017, expanding its market into Central Asia. H&M follows other chains, such as French retailer Carrefour and food chain McDonald’s, which entered the Kazakh market in the past few months. Kazakh media said that the location for H&M’s new store is likely to be Almaty, Kazakhstan’s largest city.

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(News report from Issue No. 289, published on July 15 2016)

Boardroom battle for control of Kazakhstan’s KMG EP heats up

ALMATY, JULY 14 2016 (The Conway Bulletin) — Intensifying its fight for more control over its London-traded subsidiary KMG EP, Kazakhstan’s state-owned energy company Kazmunaigas increased by 14% its earlier buyout offer to minority shareholders and retracted demands to cut the company’s independence.

Under pressure to boost income from oil and gas sales, Kazmunaigas wants to increase its 58% stake in KMG EP. KMG EP’s assets are more profitable than the assets owned by Kazmunaigas.

The problem for Kazmunaigas, though, is that its initial buyout offer of $7.88/GDR met with strong resistance from independent shareholders at KMG EP last month. The increase to $9/GDR, which Kazmunaigas issued without an explicit explanation, also appeared to attract a withering response.

“An increase in the price of the Purchase Offer would not be consistent with the prior statements made by Kazmunaigas that it ‘is not seeking to acquire any significant additional holdings in KMG EP through this offer’,” the independent directors said in a note.

They accused Kazmunaigas of underhand tactics to try to force more control over KMG EP. Specifically, the minority shareholders rallied against a new corporate governance structure proposed by Kazmunaigas that would reduce independent control of KMG EP. Kazmunaigas wanted to impose a veto against the appointment of independent directors but has now dropped these demands.

The ongoing saga within the most powerful industrial structure in Kazakhstan acts as a rare window on Kazakhstan’s corporate governance culture after a series of high profile scandals ahead of planned new IPOs, including Kazakhtelecom, the state- owned telecoms company.

KMG EP’s GDRs have traded at between $6 to $9 in the past 12 months.

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(News report from Issue No. 289, published on July 15 2016)

EBRD loans $100m to Georgia’s telecom

JULY 14 2016 (The Conway Bulletin) — The EBRD said it had loaned $100m to MagtiCom, Georgia’s largest telecoms operator, to buy Caucasus Online, a Georgian internet service provider that also works in Armenia and Azerbaijan. MagtiCom, whose main shareholders are two American telecoms companies, has almost 2m subscribers.

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(News report from Issue No. 289, published on July 15 2016)

Car sales drop in Uzbekistan

JULY 12 2016 (The Conway Bulletin) — US-Uzbek joint venture GM Uzbekistan sold 34.5% fewer cars in the Russian market in June 2016, compared to the same month last year, a sign of continued market weakness and possibly of rumoured management problems. GM Uzbekistan’s exports to Russia are down 17% in H1 2016, compared to a drop of 14% for total car sales in Russia. This year, GM Uzbekistan’s director was arrested for allegedly creating an illegal sale scheme for cars earmarked for export.

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(News report from Issue No. 289, published on July 15 2016)

Gazprom drills gas well in Tajikistan

JULY 12 2016 (The Conway Bulletin) — Russian gas company Gazprom said it drilled a second well at its Sarikamysh gas and condensate field in western Tajikistan, eight years after winning the licence. In 2013, Gazprom drilled at Sarikamysh the deepest well in Central Asia at 6,540m. Murod Jumazoda, head of the government’s Geology Department, said the project is still some way off producing gas.

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(News report from Issue No. 289, published on July 15 2016)

Armenia signs clear stream deal

JULY 11 2016 (The Conway Bulletin) — Central Depository of Armenia, the stock exchange’s securities market unit, signed a deal with debt trading house Clearstream, which is based in Luxembourg but is owned by the German Stock Exchange, which it said would boost transparency and reliability in the Armenian bond market. Clearstream made a similar agreement with Georgia in January. Armenia has become Clearstream’s 56th international partnership.

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(News report from Issue No. 289, published on July 15 2016)

Kazakh bank still suffers from Global Financial Crisis

JULY 8 2016 (The Conway Bulletin) — Kazakhstan’s Halyk Bank is still suffering from the impact of the 2008 Global Financial Crisis, ratings agency Standard & Poor’s said as it downgraded the bank’s outlook because it had not been able to reduce the proportion of toxic assets in its loan portfolio. In the first six months of 2016, overdue loans grew to 11.7% of the bank’s total portfolio, up from 9.2% at the end of 2015. Halyk Bank is the second-largest bank in Kazakhstan. President Nursultan Nazarbayev’s daughter Dinara and her husband Timur Kulibayev own Halyk Bank.

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(News report from Issue No. 289, published on July 15 2016)