Kazakhstan prepares for major privatizations

ST PETERSBURG, Russia (Reuters) - Kazakhstan is ready to cut stakes in key companies to modernize the economy, and is looking to sell banks and energy assets in the next five years, the head of the sovereign wealth fund Samruk-Kazyna said.

"We are in discussions. A political decision is pending. For many large companies linked to Samruk-Kazyna there is talk of IPOs within 3-5 years," Kairat Kelimbetov, chairman of the fund, whose holdings exceed $70 billion, told Reuters in interview.

He singled out KazMunaiGas and its subsidiaries as possible privatization targets, and said the fund was in talks with Russia's BP venture, TNK-BP, regarding a stake in Kazakhstan's largest oil refinery, Pavlodar.

Major banks, in which Samruk-Kazyna received stakes in exchange for supporting the battered sector during the recession, are also on the list. These include Kazkommertsbank, Alliance, Halyk and BTA.

Talks over the sale of BTA to Russia's biggest lender Sberbank could start after September 5, Kelimbetov said, with the acquisition potentially progressing gradually from a 10 percent holding to the fund's whole stake.

(Writing by Ben Judah)