Tag Archives: business

HM to open store in Kazakhstan

JULY 13 2016 (The Conway Bulletin) — Swedish fashion retailer H&M said it will open its first store in Kazakhstan in 2017, expanding its market into Central Asia. H&M follows other chains, such as French retailer Carrefour and food chain McDonald’s, which entered the Kazakh market in the past few months. Kazakh media said that the location for H&M’s new store is likely to be Almaty, Kazakhstan’s largest city.

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(News report from Issue No. 289, published on July 15 2016)

Boardroom battle for control of Kazakhstan’s KMG EP heats up

ALMATY, JULY 14 2016 (The Conway Bulletin) — Intensifying its fight for more control over its London-traded subsidiary KMG EP, Kazakhstan’s state-owned energy company Kazmunaigas increased by 14% its earlier buyout offer to minority shareholders and retracted demands to cut the company’s independence.

Under pressure to boost income from oil and gas sales, Kazmunaigas wants to increase its 58% stake in KMG EP. KMG EP’s assets are more profitable than the assets owned by Kazmunaigas.

The problem for Kazmunaigas, though, is that its initial buyout offer of $7.88/GDR met with strong resistance from independent shareholders at KMG EP last month. The increase to $9/GDR, which Kazmunaigas issued without an explicit explanation, also appeared to attract a withering response.

“An increase in the price of the Purchase Offer would not be consistent with the prior statements made by Kazmunaigas that it ‘is not seeking to acquire any significant additional holdings in KMG EP through this offer’,” the independent directors said in a note.

They accused Kazmunaigas of underhand tactics to try to force more control over KMG EP. Specifically, the minority shareholders rallied against a new corporate governance structure proposed by Kazmunaigas that would reduce independent control of KMG EP. Kazmunaigas wanted to impose a veto against the appointment of independent directors but has now dropped these demands.

The ongoing saga within the most powerful industrial structure in Kazakhstan acts as a rare window on Kazakhstan’s corporate governance culture after a series of high profile scandals ahead of planned new IPOs, including Kazakhtelecom, the state- owned telecoms company.

KMG EP’s GDRs have traded at between $6 to $9 in the past 12 months.

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(News report from Issue No. 289, published on July 15 2016)

EBRD loans $100m to Georgia’s telecom

JULY 14 2016 (The Conway Bulletin) — The EBRD said it had loaned $100m to MagtiCom, Georgia’s largest telecoms operator, to buy Caucasus Online, a Georgian internet service provider that also works in Armenia and Azerbaijan. MagtiCom, whose main shareholders are two American telecoms companies, has almost 2m subscribers.

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(News report from Issue No. 289, published on July 15 2016)

Car sales drop in Uzbekistan

JULY 12 2016 (The Conway Bulletin) — US-Uzbek joint venture GM Uzbekistan sold 34.5% fewer cars in the Russian market in June 2016, compared to the same month last year, a sign of continued market weakness and possibly of rumoured management problems. GM Uzbekistan’s exports to Russia are down 17% in H1 2016, compared to a drop of 14% for total car sales in Russia. This year, GM Uzbekistan’s director was arrested for allegedly creating an illegal sale scheme for cars earmarked for export.

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(News report from Issue No. 289, published on July 15 2016)

Gazprom drills gas well in Tajikistan

JULY 12 2016 (The Conway Bulletin) — Russian gas company Gazprom said it drilled a second well at its Sarikamysh gas and condensate field in western Tajikistan, eight years after winning the licence. In 2013, Gazprom drilled at Sarikamysh the deepest well in Central Asia at 6,540m. Murod Jumazoda, head of the government’s Geology Department, said the project is still some way off producing gas.

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(News report from Issue No. 289, published on July 15 2016)

Armenia signs clear stream deal

JULY 11 2016 (The Conway Bulletin) — Central Depository of Armenia, the stock exchange’s securities market unit, signed a deal with debt trading house Clearstream, which is based in Luxembourg but is owned by the German Stock Exchange, which it said would boost transparency and reliability in the Armenian bond market. Clearstream made a similar agreement with Georgia in January. Armenia has become Clearstream’s 56th international partnership.

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(News report from Issue No. 289, published on July 15 2016)

Kazakh bank still suffers from Global Financial Crisis

JULY 8 2016 (The Conway Bulletin) — Kazakhstan’s Halyk Bank is still suffering from the impact of the 2008 Global Financial Crisis, ratings agency Standard & Poor’s said as it downgraded the bank’s outlook because it had not been able to reduce the proportion of toxic assets in its loan portfolio. In the first six months of 2016, overdue loans grew to 11.7% of the bank’s total portfolio, up from 9.2% at the end of 2015. Halyk Bank is the second-largest bank in Kazakhstan. President Nursultan Nazarbayev’s daughter Dinara and her husband Timur Kulibayev own Halyk Bank.

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(News report from Issue No. 289, published on July 15 2016)

Tajikistan’s Rogun dam start surprises people

DUSHANBE, JULY 11 2016 (The Conway Bulletin) — The revival of the Rogun hydropower project, for which Tajikistan awarded a $3.9b tender last week, surprised both analysts and people living in Dushanbe.

Most had assumed that the project first dreamt up under the Soviet Union had been mothballed. There had been no major break- through on the project for the past few years and the middle of an economic downturn is no time to start a major infrastructure project.

Still, it appears Tajik President Emomali Rakhmon had other ideas. Now, Italy’s Salini Impregilo, the construction company that won the tender, says it will complete the dam, set to be the world’s tallest, and the first two power stations by 2018.

Manu, a 28-year-old student in Dushanbe, summed up many Dushanbe-residents’ thoughts when he said that he had believed that the dam would never be built.

“I thought we would not build Rogun any time soon,” he told the Bulletin’s Tajikistan correspondent. “It all happened unexpectedly but I am excited.”

If Rogun is successfully completed it will double Tajikistan’s power production and turn it into a major regional electricity exporter.

Analysts, though, were sceptical about the aggressive timeline that Salini Impregilo has set.

Filippo Menga, researcher at the University of Manchester who has studied Tajikistan’s hydropower, told the Bulletin that large dams are never built on time.

“There is still uncertainty on who is going to fund the Rogun dam, delays are clearly foreseeable. The timeline is simply not realistic,” he said.

The Rogun dam project is cer- tainly ambitious and will change Tajikistan’s fortunes if it is success- fully completed. It will also leave a lasting legacy for the 63-year-old Mr Rakhmon who, if reports are to be believed, is already thinking about his succession strategies.

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(News report from Issue No. 289, published on July 15 2016)

Turkmenistan and Georgia establish airline

JULY 5 2016 (The Conway Bulletin) — Turkmenistan and Georgia signed a deal to establish a direct flight between Tbilisi and Ashgabat from September. If the deal is realised, this will be the first direct flight route between the two countries. Last year, state-owned Turkmenistan Airlines said it aimed to open a direct route to Tbilisi.

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(News report from Issue No. 288, published on July 8 2016)

Armenia’s Ameriabank issues bonds

JULY 1 2016 (The Conway Bulletin) – Ameriabank, Armenia’s largest bank, said it issued $15m in bonds on Armenia’s stock exchange, ahead of a potential IPO. The bonds will mature in just over two years with a coupon of 6.75%. In January, Ameriabank said it was planning an IPO inLondon, after it received an investment of around $100m from international lenders.

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(News report from Issue No. 288, published on July 8 2016)