Tempering in competitive environment
April 24. Kazpravda
By Rosa AMANOVA
One hundred three of 599 companies included in the structure of the NWF Samruk- Kazyna will be sold under privatization program.
The head of state in his state of the nation address “Kazakhstan’s way -2050: common goal, common interests, common future” instructed the Government jointly with the Fund Samruk- Kazyna to analyze all state-owned companies and to determine the list of enterprises to be transferred to the private sector. In general, by 2020 the share of state ownership is planned to increase to the level of the OECD countries, i.e. 15 % of GDP.
Privatization of assets of Samruk- Kazyna is conditioned by the need for effective control and management of resources. It will allow the companies of the holding to free a significant portion of resources and invest them in new technologies, production infrastructure and development of new industries. In turn, the privatized companies in the competitive environment could become the “business sharks” able to adequately respond to new challenges.
It is worth noting that the Fund carries out permanent and systematic work to optimize its assets. Thus, the company KazMunaiGas simplified the management structure of its subsidiaries, the KTZ structured its core assets in newly created companies and JSC Kazatomprom joined the corporate center to the Ore Mining Company in order to exclude the unnecessary chain of command and duplication.
Thus, by the end of last year 11 non-core assets and 394 objects were passed to the competitive environment. Among them are: medical center Meyirim, hunting partnership Orman Bulak, some hotels, the company Samruk- ENERGOSTROYSERVIS, recreation camps, kindergartens, leisure centers, 350 apartments, offices and garages, training centers, etc.
Sixteen non-core assets and 19 objects with a total value of assets of 50.8 billion tenge in 2014-2015 will be transferred to the competitive environment, including: hotel complex Duman, sanatorium Saryagash, health center Akbulak, a rehabilitation center of the KTZ, as well as assets in Georgia, Turkey and Kyrgyzstan. Freed from the non-core ballast companies will be able to concentrate on their core activity. Along with this, the fund actually resolved the issue of bank assets’ sale. These are the stocks of shares of the BTA Bank, Alliance Bank and Temirbank.
As for the program “People’s IPO”, as known, previously 10 % of the KTO (KazTransOil) shares were successfully placed on the stock market. The company’s investment profitability in 2013 was over 23%; an average weighted price of the share in January – April of this year was 60% higher than the offering price. And the Fund has stepped up the work in this direction. In the near future they plan to place the stakes of KEGOC and Samruk-Energo under the program “People’s IPO”.
The Fund Samruk Kazyna has also prepared the list of companies involved in non-core activities (for example, production of solar cells in JSC Kazatomprom). The selection was conducted on the principle of Yellow Pages Rule. I.e. the state companies and agencies which are already present in private business and are engaged in similar activities must leave the market, as well as those which are not related to the national security and to strategic importance in a particular sector. Another criterion was the importance of the company in the performance of public functions on social support of the population.
In other cases, the company may be partially privatized – either in the stock market, or through an auction with the possible involvement of a strategic investor. At that the controlling stake remains in the fund, and its size is determined by the degree of strategic and social importance of the company.
Privatization based on such approaches, the leadership of the holding is sure, corresponds to its strategy and sets the objectives to optimize the structure of the fund’s assets, improve corporate governance and, accordingly, transparency and efficiency of the companies, to attract capitals and technologies for the development of domestic stock market and promotion of SME.
As follows from the analysis carried out by the Fund, 103 companies of 599 will be sold under the program of privatization, 50 companies will be sold along with the second-tier banks, 54 entities will be liquidated; 20 – reorganized and 5 firms will be passed to state bodies.
Also it is planned that 42 units of major assets (the companies whose equity capital is more than 2.5 billion) will be privatized, of which 10 are planned to be involved in IPO and 32 – to be put on auction. During 2014-2015, 61 medium-sized assets with the equity of 23.7 billion tenge will also be sold.