Air Astana announces price range for its IPO

Air Astana has revealed the price range for its initial public offering and placement of depository receipts on two Kazakhstani exchanges (KASE and AIX) and the London Stock Exchange (LSE), according to the company’s website. 

Air Astana is going to trade its global depository receipts (GDR) at $8.50 to $11 on the LSE and AIX, while shares on the KASE and AIX will be offered to investors at $2.13 to $2.75.

The final offering price is going to be defined within that range. The company also noted that one GDR will give the right to own four common shares of Air Astana. This means that the final share price nominated in the tenge is going to be equal to a quarter of the price of GDR converted in the tenge at the exchange rate set by the National Bank.

Investors should file applications in the tenge. The final price is expected to be announced on February 9. The press release also cited Peter Foster, who said that investors have shown great interest in Air Astana’s IPO.

The company started talking about going public about ten years ago, although its IPO was put off and rescheduled on several occasions since then. Still, the company said that it was ready for IPO back in 2018. In January 2024, the air carrier revealed that it would offer its shares and depository receipts on the KASE, AIX and LSE. Investors will be able to buy shares from two key shareholders – Kazakhstani Samruk Kazyna and British BAE Systems, as well as new shares of the company. Air Astana wants to issue new stock for $120 million. The company’s cap is expected to reach $770 million to $962 million after the IPO. Samruk Kazyna is going to keep at least 40% of the airline’s stock.

Raised funds will be used for further development of the core business of Air Astana and its supportive activities. At the same time, the company is going to keep a «reasonable level of liquidity and borrowings.» Halyk Finance has been chosen as a book-runner, while Freedom Finance became the lead manager and BCC Invest, SkyBridge Invest and Jusan Invest became co-managers of the offering.

One of the key preconditions for Air Astana’s IPO was the demand to separate FlyArystan, a low-cost division of the airline as an independent entity. In mid-January 2024, Dastan Adikhodzhayev, head of asset privatization and restructuring of Samruk Kazyna, said that this separation had already happened, with FlyArystan now a subsidiary of Air Astana.