Kcell repays debt, strengthens balance sheet by placing bonds on AIX

Kcell issued three-year coupon bonds worth $30.5 million on the Astana International Exchange (AIX), with proceeds allocated for refinancing existing liabilities, according to details shared with the Kazakhstan Stock Exchange (KASE). Just under a month earlier, Kcell closed a $184 million loan facility with Halyk Bank.

This latest bond issue marks the fourth under Kcell’s $203.7 million bond program. The recent issue volume is 150 units at a par value of $203,700 each and a 14.75% coupon rate (0.5% above the National Bank’s base rate).

On Sept. 4, 2024, Kcell issued $61 million in coupon bonds to improve its loan portfolio to meet strategic objectives and enhance financial stability. The company also issued bonds in June, raising $51 million to finance strategic goals and support its core business development. Earlier in April, Kcell issued another $30.5 million in bonds to refinance debt obligations.

«Given current market conditions, including a decrease in the National Bank of Kazakhstan’s base rate, the raised funds will help Kcell reduce interest expenses and diversify its loan portfolio. Additionally, the floating rate structure allows the company to align with market rates over the mid-term,» the company highlighted, commenting on the April issuance.

In early October, Kcell fully repaid both the principal debt and accrued interest on its non-revolving loan facility with Halyk Bank, which was initially set at $101.8 million in February 2023 and later increased by $82.5 million in September 2023, bringing the total to $184 million. The additional amount was provided on a revolving basis, with interest rates ranging from 17.75% to 19.2%. Last year, Kcell repaid $59.4 million of the principal debt, followed by $144 million over the first half of 2024.

From January through June 2024, Kcell’s profits dropped 3.3 times, reaching $11.2 million. At the same time, the company’s assets grew by 2.5% to $817 million, liabilities increased by 1.9% to $456 million and equity rose by 3.2% to $360.6 million.

Kcell’s ownership structure includes a controlling stake (51%) held by Kazakhtelecom, with additional shares owned by businessman Galimzhan Yessenov (14.87%), First Heartland Jusan Bank (9.08%), Unified Accumulative Pension Fund (7.06%) and businessman Timur Turlov, who owns 2.62% directly and an additional 6.91% through related entities. The company operates in the market under the Kcell and Activ brands.