Kcell issues $62.2 million in bonds to pursue strategic objectives

Kcell, a Kazakhstani mobile operator that operates the Kcell and Activ brands, has placed three-year bonds with a total nominal value of $62.2 million on the Astana International Exchange (AIX), according to a company statement posted on the Kazakhstan Stock Exchange (KASE) website. The funds raised will be used to «improve the loan portfolio parameters to pursue strategic objectives further and ensure financial stability.»

The coupon rate for the bonds is floating, set at the prime rate of the National Bank plus 0.5 percentage points with maturity in September 2027.

Since February, Kcell has been utilizing a credit facility from Halyk Bank. Initially set at $103.6 million, the facility was later increased to $187.6 million, which at that time represented 26.9% of the company’s total book value of assets. The funds are reportedly available for refinancing previous loans and are also intended for investment programs. Kcell has received tranches from this facility regularly, with the most recent allocation being $1 million at the end of August.

Over the past few years, Kcell has secured loans from various banks in Kazakhstan. In the mid-2010s, the company arranged an $87 million credit line with Halyk Bank, which was later extended but eventually repaid early. Kcell also obtained loans from VTB, the Bank of China in Kazakhstan and Jusan Bank. The debt to Jusan Bank was repaid ahead of schedule after the bank became a major shareholder in Kcell. Jusan Bank now holds 9.08% of Kcell’s shares, while Galimzhan Yessenov, the owner of Jusan Bank, holds 14.87%.

Additionally, in February, Kcell received an $82.9 million loan from its largest shareholder, Kazakhtelecom (which owns a 51% stake). This loan is designated for the development of 5G networks. Kcell, along with another Kazakhtelecom subsidiary, Mobile Telecom Service (operating the Tele2 and Altel brands), won the frequencies in an auction in December 2022.