Last events in financial market interrupted several deals in Kazakhstan. Independent rating of the country has changed. Experts forecasted a big number of mergers in 2007. According to estimation of “Ernst and Young”, aggregate volume of merger and acquisition market in Kazakhstan exceeded $7,5 billion in 2006, and sector of banking services is becoming more attractive for potential buyers. Price Water House Coopers, however, suggests three main obstacles for the companies. These are overpriced assets, limited number of offers and extremely strict domestic regulations on mergers.
The great example of above is the attempt to purchase one of the largest oil companies in Kazakhstan –“Mangistaumunaygaz”. At the end of September, The Wall Street Journal informed, with reference to its sources, that western companies are interested in this purchase.
At present time, Central Asian Petroleum Ltd officially owns MMG (it controls 97% of outstanding shares). However, according to unofficial sources, Rakhat Aliev, the former son-in-law of the President, is the owner of “Mangistaumunaygaz”, which was established with assistance from Indonesian investors in 1995. Nowadays the company has 7 percent share of total oil extraction industry in Kazakhstan. Proved reserves of the company are equal to 500 million barrels. Therefore, considering current price of oil, this company is an extremely attractive asset. Moreover, the company owns Pavlodar petroleum refinery with planned production capacity of 7,5 million tons of oil a year.
In the end of last year Central Asia Petroleum Ltd put “Mangistaumunaygaz” concern for sale.
At the same time, company asked for delisting of its shares because of possible raiding, guaranteeing not to reorganize or change the ownership type. However, only insignificant part of preference shares, consisting of 3% of total shares of “Mangistaumunaygaz”, is traded on KASE. Simultaneously, speculations started, pointing out the willingness of Russian Lukoil, “Gazprom” and “Rosneft” to purchase the company. The amount of four billion dollars was mentioned as the price for the asset. After some time Indonesian company withdrew its selling offer.
Investors, however, are still interested in purchase of the company. Moreover, it captured attention of several unnamed American companies in autumn. According to The Wall Street Journal, the attention of west companies is understandable – executives of MMG started analyzing the environment in an attempt to find buyers for their asset. The price for the company is still unchanged. However, unclear structure of company’s owners and probable attention of Kazakhstan’s authorities to the transaction worries potential buyers.
The government though is interested in other assets as well. Russian «Severstal» purchases nearly 12,3 million ordinaries of Irish extraction company Celtic Resources Holdings Plc.
This share holding, accounting for 22% of share capital of Celtic, will be bought from Aton International Ltd. for cash. Irish company extracts gold in Kazakkhstan at Suzdal and Zherek deposits and molybdenum at Shorskiy deposit. In addition, Celtic owns 75 % of Tominsky copper and gold deposit in the South of Chelyabinsk region and already started exploiting it. Celtic