December 4, 2017 / 5:21 AM / a year ago

UPDATE 1-KMG EP says plans share buyback, delisting

(Adds details, context)

ALMATY, Dec 4 (Reuters) - Kazakh upstream company KazMunaigas Exploration Production (KMG EP) plans to launch a tender offer to repurchase all of its outstanding global depositary receipts (GDRs) at $14.00 per GDR, it said on Monday.

If the offer succeeds, KMG EP plans to buy out other outstanding common shares and delist from the London Stock Exchange as well as the Kazakhstan Stock Exchange, it said in a statement.

The move could pave way for the listing of the company’s biggest shareholder, state-owned National Company KazMunayGaz (NC KMG).

Kazakhstan plans to privatise NC KMG within the next few years, but it cannot be listed on a major stock exchange alongside its main upstream subsidiary. Previous attempts to restore full control over KMG EP have failed.

Minority shareholders of KMG EP last year rejected NC KMG’s proposal to give the parent company more control over its subsidiary and the option to sell their shares to NC KMG.

NC KMG has a 58 percent stake in KMG EP, which currently sits on a $4 billion cash pile. Minority shareholders include Chinese sovereign wealth fund China Investment Corporation, and funds overseen by Western managers such as BlackRock.

The price of the offer represents a premium of 23.7 percent to the 30-day volume-weighted average GDR price of $11.32 at Dec. 1, KMG EP said. The GDR last closed at $11.80. (Reporting by Olzhas Auyezov; Editing by Stephen Coates and Gopakumar Warrier)

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