* SMEs selling to Central Asian, Chinese, European buyers
* KMG stake to be sold once oil price rebounds
* Privatisation process could extend beyond 2020
LONDON, Sept 21 (Reuters) - Kazakhstan’s $65 billion sovereign wealth fund Samruk-Kazyna has sold 34 small and mid-sized companies by public auction as part of its privatisation drive, a managing director of the fund said on Wednesday.
Baljeet Grewal declined to say who had bought the companies, or how much has been raised in the first phase of an ambitious five-year plan which will culminate in public offerings of stakes in some of the country’s biggest companies.
The oil-rich Central Asian nation was hit hard by the collapse in world oil prices from a high of $115 in June 2014 to a trough of $27 in January 2016.
To raise money it plans to sell off hundreds of companies held by Samruk-Kazyna in whole or in part, ranging from the very small to behemoths such as energy producer KazMunayGaz (KMG) and flagship carrier Air Astana.
To date, Grewal said the fund had sold 34 of the 172 smaller “non-core” companies that have been earmarked for sale via public auction, including helicopter company Euro-Asia Air, which has been sold to a European company.
“The majority of these investors largely come from Central Asia, China and Europe,” she told Reuters but said she could not disclose any buyers’ names.
She added that so far no company had failed to sell, but Samruk-Kazyna is prepared to liquidate or merge any companies left on the shelf.
Seven large companies have been slated for public listings from 2018-2020. As well as KMG and Air Astana, these include railway giant Kazakhstan Temir Zholy, uranium miner Kazatomprom and postal service KazPost.
Grewal said Air Astana would be among the first to be listed, with the state retaining a minority stake. In other cases, she expected a maximum of a 25 percent stake in a company to be sold.
The KMG stake could list towards the latter part of 2018, to coincide with an expected recovery in the oil price, she said. She expects to see prices back up to around $55-$60 a barrel by then, from the current $47 a barrel, as the oil glut erodes.
Minority shareholders of KazMunaiGas Exploration and Production (KMG EP), KMG’s upstream subsidiary, in August rejected KMG’s proposal to give the parent company more control over its subsidiary and the option to sell their shares to KMG. KMG has a 58 percent stake in KMG EP.
Grewal, who was in London to speak at an investment conference, denied the process was a failed exercise and said the intention was to give minority shareholders the option to exit, given the slump in oil prices.
The privatisation process of the seven large assets could extend beyond 2020, she said, adding: “It depends on the consideration for the asset and the market itself.”
Stakes in another 37 core companies are expected to be sold to strategic investors - either best-in-class industry participants or financial investors.
“We have brought in new people and have been cutting some of the excess fat in some of our portfolio companies,” she said. “We want to create value in the companies prior to taking them public.” (Reporting by Claire Milhench; Editing by Adrian Croft)
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