Economy • 17 July, 2018

Privatization carried out according to schedule — Bakhyt Sultanov

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July 17 at the meeting of the Government chaired by the Prime Minister Bakytzhan Sagintayev, the progress of privatization process was considered, reports primeminister.kz.

As Minister of Finance Bakhyt Sultanov informed, following the first half year results of 2018, 502 out of 887 objects of the Comprehensive Privatization Plan were put up for sale, of them, 421 for 216 billion tenge were sold.  At the stage of reorganization and liquidation there are 266 facilities, the implementation of the Privatization Plan, taking into account the reorganized and liquidated objects, is 77.4%.

"It was planned to put up 104 objects for sale in the first half of this year. In fact, 89 were put up and regarding 15 remaining companies, it was decided to reorganize and liquidate them. Of the objects for sale, 39 were sold for a total of 36 billion tenge," Sultanov reported.

In addition, of the 63 top objects of the Comprehensive Plan, 15 have been sold for 110.5 billion tenge. This year it is planned to sell 39 top objects, eight of which were put up in the first half of the year, including 2 sold. The remaining facilities are at the stage of pre-sale preparation and negotiations with potential buyers.

Sultanov also specified that, based on the results of the inventory, additional 38 objects of communal property and social entrepreneurial corporations will be additionally included in the list of privatization objects, after which the relevant sellers urgently need to take measures to compile and submit to the Register of Road Maps.

"In general, the privatization process is in line with sales schedules. Until the end of this year, 87 more objects will be put in the list, including 20 objects of republican ownership, 31 — of municipal property and 36 assets of the quasi-public sector," Sultanov added.

In his turn, Minister of National Economy Timur Suleimenov said that to ensure the IPO of companies, within the framework of the ongoing work on the implementation of the Comprehensive Privatization Plan for 2016-2020, together with the Fund, a package of amendments to the Law "On the Securities Market" is being developed.

"The changes are aimed at removing legislative restrictions that impede the public offering of shares of national companies that are members of the Fund group. To date, the amendments are under consideration by state bodies and the National Bank," Suleimenov said.

At the same time Suleimenov noted the expansion of the list of organizations subject to privatization. Thus, according to the instructions of the Head of State given in the Address "New Opportunities under the Fourth Industrial Revolution," the work continues to inventory the state and quasi-public sector facilities. The Ministry drafted a resolution providing for the introduction of amendments to the Privatization Plan on increasing the number of organizations subject to privatization by 38 units. At present, the draft resolution is being approved by the state authorities.

Deputy Chairman of JSC Sovereign Wealth Fund "Samruk-Kazyna" Alik Aidarbaev, informed that as part of the Comprehensive Plan, as of July 1, 2018, the Fund sold 80 assets worth 139.78 billion tenge, 64 assets were liquidated or reorganized.

"In 2018, Transtelecom JSC, Aktau Oil Equipment Plant LLP, Kazakh Academy of Transport and Communications after Tynyshpayev (Almaty), as well as its eight subsidiaries, including colleges in different regions of the country, KazMunaiGas-Service (Georgia), Borjomi Likani International, Kaskor-Transservice, Semurg Invest Temir Zholy were sold. Pre-sales preparation and evaluation of such large assets as airports in Aktobe, Atyrau and Pavlodar are being conducted. For Kazmortransflot and Kazakh-British Technical University, methods of sale have been coordinated and auctions are expected to be held soon," Aidarbayev said.

In addition, special attention is paid to the possible IPO of the largest national companies. Three out of six candidate companies are already preparing for possible IPO deals, such as Kazakhtelecom, Kazatomprom and Air Astana.

Chairman of the Baiterek JSC Aidar Arifkhanov said that the holding includes the sale of seven subsidiaries of JSC Investment Fund of Kazakhstan, eight subsidiaries of JSC National Agency for Technological Development, as well as JSC National Agency for Technological Development and JSC Housing Construction Savings Bank of Kazakhstan.

"To date, the privatization of assets of the Investment Fund of Kazakhstan is almost complete. Of the Fund’s seven assets for privatization, five has been sold, liquidation procedures are being carried on two assets," Arifkhanov said.

According to him, in order to find an investor for Housing Construction Savings Bank, the financial consultant conducts negotiations with 11 international companies. It is expected that the pre-investment expertise on privatization will be continued in accordance with changes in the market and the introduction of the necessary amendments to the Law "On Housing Construction Savings," scheduled for September 2018.

Chairman of KazAgro NMH Rustem Kurmanov said that in the framework of the Comprehensive Privatization Plan, the holding plans to sell 20 assets.

“In 2018 it is planned to sell three assets from the top 68 list to strategic investors: KazAgroFinance JSC, KazAgroProduct JSC, Kazagromarketing JSC. On the 17 affiliated organizations of the holding, the shares in five companies have been sold: AgroExport LTD, AgroTradeExport, Makhambet MFI, Zhiger Esil MFI and KazBeef LTD,” Kurmanov reported.

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