MAY 6 2016 (The Conway Bulletin) – Kazkommertsbank’s chairman, Kenes Rakishev, said he is ready to buy out minority shareholders offering 211 tenge ($0.63) per share. The deal, which is expected to be concluded by the end of the year, will cost $145m and will give Mr Rakishev full ownership of the bank. Directly and indirectly, Mr Rakishev now owns 71% of Kazkommertsbank.
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(News report from Issue No. 280, published on May 13 2016)
ALMATY, MAY 6 2016, (The Conway Bulletin) – Prosecutors in Romania ordered the seizure of the Petromidia refinery part-owned by a subsidiary of Kazakhstan’s Kazmunaigas as they re-opened an investigation into its privatisation in the 2000s.
The seizure of the refinery comes only a few days after China’s CEFC China Energy Company Limited completed a $680m deal to buy a 51% stake in KMG International, the Kazmunaigas subsidiary that owns the Petromidia refinery. Kazmunaigas has been looking to sell off assets and raise cash to help it through a sustained economic downturn.
Rompetrol was renamed KMG International in 2014, although the Rompetrol brand still lingers.
Romanian investigators have been focused on recovering cash they say is owed to it after a deal by the late Dinu Patriciu to buy the Petromidia refinery in 2003 from the state for $760m through Rompetrol, which he owned. He bought the Petromidia refinery from the government not with cash but with a bond.
In 2007, Patriciu sold Rompetrol and its daughter companies to Kazmunaigas for $1.6b.
When in 2010 Rompetrol’s bonds reached maturity, Kazmunaigas refused to pay the government the $600m coupon. Instead it gave the Romanian government a 45% stake in Rompetrol. This was reduced to 18% in 2014 after the Romanian government agreed to sell Kazakhstan a 27% stake for $200m.
KMG International said it had not been involved in any wrongdoing and that this legal case could damage its business plans in Romania.
“These are new developments which may have significant negative impact on KMG’s strategic objectives and development plans in Romania,” the press service said in a statement.
The company later also said it is also ready to take legal action.
“We will analyse the facts about the charges and to what extent such deeds justify the seizure of company assets. If we find that the seizure is not justified, we will challenge those seizures,” Gheorghe Albu, a lawyer for KMG International lawyer, said.
Petromidia is Romania’s largest refinery and is situated near Năvodari on the Black Sea coast.
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(News report from Issue No. 280, published on May 13 2016)
MAY 9 2016 (The Conway Bulletin) – Iran’s deputy oil minister, Amir Hossein Zamaninia said his country plans to swap oil and gas with Russia, Kazakhstan and Turkmenistan. Currently, Iran relies solely on Turkmen supplies for its northern provinces. In the past few years, Iran has signed short-term swaps with Kazakhstan and Russia. The new plan aims to turn these short-term deals into long-term agreements. Central Asian states, especially Kazakhstan, have been keen to pull Iran into their sphere of economic influence since most sanctions were lifted earlier this year.
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(News report from Issue No. 280, published on May 13 2016)
MAY 3 2016 (The Conway Bulletin) – Switzerland-based miner Glencore said it is considering selling its share in the Vasilkovskoye gold mine in Kazakhstan for around $2b. Glencore owns 70% of Kazzinc, the company that operates Vasilkovskoye which is located 300 km north-west of Astana. According to unnamed sources quoted in the Wall Street Journal, the buyers could be Chinese investors. China has been looking to buy Kazakh gold.
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(News report from Issue No. 279, published on May 6 2016)
APRIL 29 2016 (The Conway Bulletin) – Kazakhstan has sold 218m kWh of electricity to Kyrgyzstan in 2016 at a price of 9 tenge ($0.03) per kWh from the Ekibastuz power station, the Kazakh government said. Kazakhstan earned around $6m from the sale. Kyrgyzstan is a net importer of electricity from neighbouring countries due to chronic water shortages in recent years. Last year, Kazakhstan and Tajikistan exported around 400m kWh to Kyrgyzstan.
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(News report from Issue No. 279, published on May 6 2016)
MAY 6 2016 (The Conway Bulletin) – In a choreographed government meeting, Kazakh President Nursultan Nazarbayev blamed everyone but himself for the turmoil that proposed amendments to the land code have brought to the country.
The presidential press service posted parts of the government meeting on Facebook showing an angry Mr Nazarbayev.
He dressed down the ministers of economy and agriculture for having failed to explain the land reform to the population. With a patronising tone, Mr Nazarbayev said the population had been unable to understand the reform and needed to be spoon-fed details.
Once more, Mr Nazarbayev wanted to portray himself as the strong leader, the one who understands the people.
Nobody should be fooled. These were, and still are, Mr Nazarbayev’s reforms.
Everyone in Kazakhstan knows that for a bill to pass, especially an important one such as the land code, Mr Nazarbayev’s input is crucial.
He misjudged the appetite of the people to accept the land reforms.
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(Editorial from Issue No. 279, published on May 6 2016)
MAY 5 2016 (The Conway Bulletin) – A union of metal workers at the ArcelorMittal Temirtau factory in central Kazakhstan said it would appeal to the Prosecutor General against the company’s plans to cut benefits and, ultimately, lay off workers. According to Zhaktau, the union, several workers have had their full-time contract changed into freelance project work. The union also said the company plans to sack 700 workers by the end of the year. ArcelorMittal Temirtau did not comment.
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(News report from Issue No. 279, published on May 6 2016)
MAY 3 2016 (The Conway Bulletin) – A Kazakh mining government agency said it will auction 101 gold, copper, manganese and other precious metals mines on June 16. The auction, Kazakhstan’s second, will be conducted within the framework of the International Mining and Metallurgical Congress. Last year’s auction earned the state budget around 1.5b tenge ($4.5m).
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(News report from Issue No. 279, published on May 6 2016)
MAY 5 2016, ALMATY (The Conway Bulletin) — Kazakhstan’s Central Bank cut its key interest rate by two percentage points to 15% because it said that inflation was slowing and the overall economic outlook was improving.
The consumer price index grew in April to an annualised rate of 16.3%, its highest since 2009, but the Central Bank said that the pace of inflation had slowed.
“Seasonally adjusted, annualised month-on-month inflation for each of the last three months was within the target range for the annual inflation set between 6% and 8%,” the Central Bank said in a statement linked to its rate change.
“A survey of households also showed that expectations of inflation have subsided as well.”
After months of poor economic data and a 50% devaluation of the tenge currency, any prognosis on Kazakhstan’s economy which is even vaguely positive will be seized upon and lauded. This is the first time in months that Kazakhstan’s Central Bank has shown confidence in its ability to control the money market, a sign that the worst period of a regional economic downturn might be over.
Still, the Central Bank did add a large dash of caution to its outlook.
It said that a potential downside risk to the economy was the “increased tenge-denominated high interest rate liabilities” held by commercial banks, which could put pressure on the financial sector. This is, essentially, a reference to bad loans.
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(News report from Issue No. 279, published on May 6 2016)
APRIL 29 2016 (The Conway Bulletin) – Kazakhstan-based Olisol will inject 9.8m Canadian dollars ($7.6m) into Tethys Petroleum, a Guernsey based oil and gas company, triggering a new share issue. The long-negotiated agreement will bring Olisol’s ownership in Tethys to 42%. Shareholders will vote on the deal at the annual meeting at the end of May. Tethys operates in Kazakhstan, Tajikistan and Georgia.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 279, published on May 6 2016)
