Kazakhstan's Privatisation Decree04 april 2016, 17:12
GRATA Finance & Securities Group has released a legal alert covering important legal developments in the Kazakhstani legislation that occurred in 2015.
Most of the changes were introduced in the legislation pursuant to adoption in May 2015 of a new policy document – the Plan of the Nation: 100 Steps for Implementation of 5 Institutional Reforms – governing the development of Kazakhstan in the short-term perspective.
The legal review covers the following areas:
1. Law on Corruption Countermeasures
2. New Civil Procedure Code
3. Law on Astana International Financial Center
4. Law on Judicial System
5. Law on Supreme Judicial Council
6. Resolution on Application of Bankruptcy and Rehabilitation Legislation by the Courts
7. New Commercial Code
8. PPP Law
9. Law on WTO Accession
10. Law on Special Defensive, Antidumping and Compensational Measures
11. Law on Ownership Right Further Protection
12. Law on Amendments to Electric Power Industry
13. Law on Amendments Related to Non-performing Loans, Financial Services and Financial Organisations
14. Law on Agricultural Cooperatives
15. Privatisation Decree
16. Rules of Electronic Trades
17. New Procurement Law
Each of them is addressed in a separate release on our website, whereas the today’s release deals with the Privatisation Decree.
On 6 January the Ministry of National Economy presented a list of about 260 state owned companies and subsidiaries of national holdings, which are going to be privatised/transferred to the competitive environment. The Government Decree No. 1141 dated 30 December 2015 “On Several Issues Related to Privatisation” (the “Privatisation Decree”) has entered into force on 1 January 2016. Such privatisation is one of the main crisis response measures of the Kazakh Government intended to reduce the presence of the state in business and cut down expenses on business support as well as make up for the budget loss from the lower oil price.
The privatisation shall be conducted until 2020 and will be held through auctions and tenders, stock exchange trades, two-stage competitive tendering and sale of derivative securities. It is also expected that the targeted sale of the companies to the strategic investors will be used. The assets with the balance value of more than KZT 5 billion will be sold directly or through IPO or SPO.
The Decree approved a systematic plan of privatisation for 2016 – 2020 and its target indicators. The systematic plan provides for the establishment of project office which will include international consultants and will advise the Kazakh Government on the privatisation process. The main function of the project office is to give recommendations on the privatisation policy, pre-sale preparation, transaction terms and potential clients. The target indicators are: (i) reduction of quasi state companies owned by the central government by 15% by 2021 and (ii) transfer of 5% of companies owned by the local governments to the competitive environment.
The list of the companies to be privatised/transferred to the competitive environment includes, inter alia:
Oil and gas: JSC “National Company “KazMunayGas” (IPO), “PetroKazakhstan Oil Products” LLP, “Atyrau Oil Refinery” LLP, JSC “KazTransGaz Almaty”, “BeineuMunayGas” LLP, Rompetrol Petrochemical SRL etc.;
Railway: JSC “National Company “Kazakhstan Temir Zholy” (IPO), JSC “KazTemirTrans”, “Tulpar Talgo” LLP etc.;
Energy: JSC “National Company “Kazatomprom” (IPO), JSC “Samruk-Energy” (IPO), JSC “Almaty Electric Power Plants”, JSC “Alatau Jaryk Kompaniyasy”, “AlmatyEnergoSbyt” LLP etc.;
Chemical Industry: “Astana Solar” LLP, “Kazakhstan Solar Silicon” LLP, JSC “Irtysh Chemical-metallurgical Plant” etc.;
Aviation: JSC “Air Astana” (IPO), JSC “Qazaq Air”, JSC “Astana International Airport”, airports of Kyzylorda, Pavlodar, Shymkent etc.;
Banking and finance: JSC “Housing Construction Savings Bank of Kazakhstan”, JSC “Investment Fund of Kazakhstan”, JSC “KazExportGarant” etc.;
Agriculture: JSC “National Company “Food Contract Corporation”, KazAgro, JSC “KazAgroProduct”, JSC “KazAgroFinance” etc.;
Communication: JSC “Kazakhtelecom” (IPO), JSC “Kazpost” (IPO), JSC “Trancetelecom” etc.
We note that it not the full list of the companies. For more details, please go to http://adilet.zan.kz/rus/docs/P1500001141.
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Shaimerden Chikanayev, Partner
Mob: 7701 7878020
Marina Kahiani, Partner
Mob: 7701 7251269
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