Kazakh Wealth Fund to Sell 10% in State Oil Firm KMG to Central Bank

Reuters

ALMATY, July 29 (Reuters) – Kazakhstan's sovereign wealth fund will sell 10 percent of shares in state oil firm KazMunaiGas to the central bank, the government said on Wednesday, in a move aimed at easing the debt burden of a company hit by low oil prices.

Samruk-Kazyna, which manages the Central Asian nation's largest state-owned assets, is to sell a package of 10 percent plus one ordinary share to the central bank for a price not less than 750 billion tenge ($4 billion), the government said in a statement signed by Prime Minister Karim Masimov.

"This is yet another step after an earlier one made by the fund to help KMG lessen its debts," a source at Samruk, who asked not to be named, told Reuters by telephone from the capital Astana.

The source did not give details on how the stake sale would reduce KMG's debts.

KMG said this month it would sell its 50 percent stake in the multinational project developing the giant Kashagan oilfield to Samruk in a bid to reduce its debts. It said at the time it expected to raise about $4.7 billion from the sale.

KMG's consolidated net debt exceeded $18 billion this month, the Samruk-Kazyna source told Reuters.

KMG, which has been hit by a fall in world oil prices, holds 16.81 percent in Kashagan, the world's biggest oil find in decades which is located on the Caspian Sea shelf.

The field started output in September 2013 but halted production a few weeks later after gas leaks were detected in its pipelines. KMG said this month it expected Kashagan's oil production to resume in early 2017.

(Reporting by Mariya Gordeyeva; Writing by Dmitry Solovyov; Editing by Mark Potter)

Copyright 2016 Thomson Reuters. Click for Restrictions.

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