Kazakhstan’s Kcell says City is a key IPO hub

David Hellier
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VEYSEL Aral, the chief executive of Kazakhstan's largest mobile telephone operator, Kcell, said yesterday his group was planning a public listed offering in London because the UK capital had a “sophisticated investor base” and was a “key hub for emerging markets companies”.

Kcell’s decision to list its shares here and in Kazakhstan is a boost for the City, which has hosted just four main market listings in 2012, well down on previous years.

Aral said that to the best of his knowledge neither majority shareholder TeliaSonera nor the group’s banking team ever seriously considered listing anywhere else, such as New York. “There are more than 10 Kazakh companies listed here in London,” he said, including Kazakhmys and ENRC.

In its upcoming flotation, Kcell, which is being advised by Credit Suisse, UBS and Renaissance Capital, will see the stake held by Nordic telecoms group TeliaSonera come down from around 80 per cent to around 60 per cent in a transaction that could see the seller raise around £500m.

The deal is likely to compete for investor attention with MegaFon, Russia’s second-biggest mobile operator, which aims to raise $2bn in a London IPO by the end of the year.

Kcell, whose distinctive purple logo appears on billboards and store fronts around Almaty, Kazakhstan’s commercial capital, has 12.7m subscribers in the ex-Soviet republic, giving it a market share of nearly 48 per cent.

The company generated revenues of $1.19bn last year and net profit of $446m. The Ebitda margin was 59.2 per cent.

In the first nine months of this year, revenue was $888m, net profit $307m and Ebitda margin 56 percent. “Our board... adopted a decision to pay out a minimum 70 per cent of our net income as dividends,” Aral said.