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Air Astana to outline plans for London IPO

Joe Worthington
Air Astana is 49 per cent-owned by BAE Systems and 51 per cent by the government-controlled sovereign wealth fund
Air Astana is 49 per cent-owned by BAE Systems and 51 per cent by the Kazakhstan government-controlled sovereign wealth fund (Source: Getty)

Kazakhstan flag carrier Air Astana will detail plans for its initial public offering today, with London in line to be chosen for a secondary listing.

In a presentation today it’s expected the company will outline how much of it will be sold. The IPO is currently scheduled for between October next year and October 2018. Astana will initially list on the Kazakhstan Stock Exchange with a potential second listing in Hong Kong, Singapore, or London.

Astana president and chief executive Peter Foster is considering a secondary offering concurrent to a listing in Kazakhstan, either in London, Hong Kong or Singapore.

The airline, the largest in central Asia, is 49 per cent-owned by BAE Systems and 51 per cent by the government-controlled sovereign wealth fund Samruk Kazyna.

In 2014 Astana’s net profit was $19.5m, and it currently runs 30 aircraft between major Asian and European cities. Cash from the IPO will be used to fuel expansion.

Astana is expected to be the first central Asian airline to go public.

As the tourism and natural resource sectors expand across the region, the listing could give Air Astana a head start with its existing foothold in many of the major cities.

BAE shareholders could be the biggest winners from this listing. When the IPO happens, BAE shareholders will have been holding the stock for 16 years, buying when shares were low.

Listing in London, combined with plans to adopt a UK financial framework, could lend some confidence in the strength of Air Astana.

Foster is believed to be aiming for a float at a time when business and markets are picking up, and at a time when investors have an appetite for risk.

Foster’s role at the airline could change after the listing, with his career focused on building growth.

It's included stints restructuring Philippine Airlines from bankruptcy and expanding Qatar Airways, National Jet Italia, and Royal Brunei Airlines.

It's thought he could leave the airline if the listing goes to plan.

A decision on what percentage of shares to list is set to be made in September, listing banks are set to be appointed by February 2017.

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