Kazakh government adds new companies to privatisation drive

20 April 2017
The Kazakhstan Aviation Industry is able to undertake MRO work on Airbus C295M aircraft (pictured). The facility has been added to the 'People's IPO' list. Source: Airbus Military

The Kazakh government and sovereign wealth fund Samruk-Kazyna have announced that they are adding four subsidiaries of state-owned defence and engineering firm Kazakhstan Engineering to the list of state assets for sale.

The four companies added to the government's 'People's IPO' on 14 April include Kazakhstan Engineering's stake in: equipment manufacturer Kirov Machine-Building Plant; caterpillar track manufacturer and repairer Semipalatinsk Machine-Building; medical equipment manufacturer Tynys; and aircraft maintenance, repair, and overhaul (MRO) facility Kazakhstan Aviation Industry.

In addition, the government announced that it will remove a number of companies from the privatisation drive, including, among others, a football club and nuclear security organisation, as well as weapons and ammunition manufacturer JV Arsenal Mashzavod and engineering firm JSC Ulan.

In a statement on the changes to the privatisation programme, Director of the Department of Asset Privatisation and Restructuring for Samruk-Kazyna, Dauren Tasmagambetov, said that the "decision to remove seven assets from the privatisation programme was motivated by the need to maintain state participation in the companies of strategic socio-economic importance, or in certain cases because privatisation was no longer considered viable".

The announcement comes after the sale of some Kazakhstan Engineering assets has begun to bear fruit, despite a number of failed attempts. In January the 832 Auto Repair Plant was sold via a Dutch auction for KZT70.83 million (USD228,593) - down from a starting price of KZT329.99 million. The 832 Auto Repair Plant undertook MRO of Russian-sourced UAZ and GAZ military vehicles, which remain popular in Kazakhstan.

Additionally, the government successfully divested a 2.67% share in helicopter MRO facility Aircraft Repair Plant No 405 and a 4% stake in aero-engine MRO facility Aircraft Repair Plant No 406 in October 2016, both of which were owned by Kazakhstan Engineering.

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