2000-02-07 Kazak Corporate News
Kazakhstan Weekly
Corporate News
Monday February 7, 2000
Oil & Gas
The Calgary-based company Hurricane Hydro-carbons Ltd. announced on Monday that an Alberta court has extended the company’s bankruptcy protection until 25 February 2000. Hurricane also filed an amended restructuring plan to the court on how the company will handle repayments to its creditors. The court will review the plan on February 7 and has set February 22 as the date for any creditor meeting.
Hurricane, which operates in Kazakhstan through its Hurricane Kumkol Munay affiliate, has been in bankruptcy protection since defaulting on its debt last spring. Now that the price of oil has risen, the company is working with the Dutch investment bank ING Barings to raise new debt to pay existing bondholders, provided that a consensual plan cannot be reached with current bondholders.
The company said it remains committed to resolving its debt with its creditors in a satisfactory manner, emerging from bankruptcy protection, and completing its pending merger with the Shymkent Refinery by 31 March 2000. (Golden Eagle Partners)
Metals & Mining
The Donskoy Mining Plant, a unit of KazChrome, extracted 2.405 million tonnes of chromium ore in 1999, a 51% increase over the 1.602 million tonnes produced in 1998. As reported by the plant’s press service, the increase in ore production was achieved due to a reduction in expenses and the more efficient use of the company’s internal reserves.
In addition, last year the company launched operations at the Tsentralnaya mine and the Poiskoviy open pit. Previously, the company was developing only the Molodezhnaya mine. At present, the main consumers of the ore produced at Donskoy include KazChrome’s Aksu Ferroalloys Plant in the Pavlodar region and JSC Ferrochrome (the Aktyubinsk Ferroalloy Plant), as well as the Aktyubinsk Chemical Compounds Plant and various Russian ferroalloy plants. (Interfax)
JSC Aluminium
The JSC Aluminium of Kazakhstan turned out 1.152 million tonnes of alumina at its Pavlodar facility in 1999, a 6.7% increase over 1998. Bauxite production at Aluminum of Kazakhstan’s Turgay and Krasnooktyabrsk ore mines reached an annual output of 3.6 million tonnes, up 4.9% over 1998.
Investments in fixed capital by the company last year were KZT 1.493 billion, twice that of 1998. Funds allocated to upgrade the technical condition of the mining equipment totalled KZT 734 million.
According to the press service, Aluminium of Kazakhstan paid KZT 4.3 billion in taxes last year. The company directly employs about 10,000 people.
Aluminium of Kazakhstan sold most of its output to aluminium smelters in Siberia last year. The company earned about KZT 18.3 billion, or USD 154 million. (Golden Eagle Partners)
Bogatyr Access Komir
Bogatyr Access Komir, the local arm of the US-based Access Industries, plans to turn out some 35 million tonnes of coal at the Bogatyr and Severniy coal mines this year. The projected total is a six million tonne increase over its 1999 production.
Both of these Kazakhstani open pit coal mines may become units of the UralTEC joint venture, which Access Industries is working to establish along with the Russian power company UES Rossia. UES already owns the Severniy mine, which Access manages in trust. The UralTEC venture would also include three UES power plants in the Russian cities of Troitsk, Reftinsk and Verkhnetagil.
The Russian side optimistically believes that Ural TEC will boost coal production by 5.3%, reduce coal costs by 7.5% and increase power generation at the three power plants by 15%, while lowering the power costs by 8.6%. (Golden Eagle Partners)
Banking
The regional commercial bank Komirbank has listed domestic dollar-denominated bonds for sale on the KASE, the Panorama newspaper reported. The 2000 bond issue is worth a total of USD 2 million.
Annual interest on the Komirbank bonds is 12%, calculated semi-annually, with a maturity date of 26 December 2000. Revenues will be used to finance small businesses through the bank’s affiliates.
According to Komirbank representative Sholpan Sarsenbayeva, the bank has submitted all required documents to the KASE to be included on the exchange’s “A” list. An unofficial source disclosed that Komirbank is likely to be put on the “A” list if its expected merger with Altur Alyans Bank goes through. (Panorama)
Finance
A consortium led by the accounting firm Ernst & Young has received the nod from Kazakhstan’s government to consult on the sale of a stake in oil producer MangistauMunaiGas (MMG).
MMG is one of several partially-privatised enterprises slated for the government’s blue chip program to sell some or all of the remaining state-owned shares. The private firm Central Asia Petroleum owns a majority 60% stake in the enterprise. Up to 30% of MMG will be put up for sale, along with 25.2% of Aktobemunaygas, and stakes in the Ust-Kamenogorsk Titanium-Magnesium Plant and Kazakhmys. In addition to Ernst & Young, the IDEY Ltd. consortium includes Petroconsults, a subsidiary of the IHS Energy Group, and the law firm Denton Hall Valdez Krug. (Golden Eagle Partners)
Telecommunications
Kazakhtelecom’s 1999 revenue grew 18% from 1998 to KZT 30 billion or 2% of the country’s GDP, said Nurlan Sakipov, President of Kazakhtelecom at a conference in Astana. He estimated a 13% to 15% growth in revenue in 2000. The company plans to invest USD 37 million out of USD 50 million granted by the European Bank for Reconstruction and Development (EBRD) late last year. Mr Sakipov specified that the largest share of the company’s revenue in 1999 came from international and domestic outgoing traffic. (Interfax)
Power
Kazakhstan’s national power grid operator KEGOC announced that the accounting firm KPMG has won a tender to conduct auditing services. Arthur Anderson previously provided auditing services for KEGOC. According to a KEGOC spokesman, the company needs to have an international audit conducted in order to obtain loans. In December 1999 KEGOC signed a five-year loan agreement with the EBRD for USD 45 million. This money is to be directed towards upgrading the safety and quality of power transmission and distribution. The World Bank also recently approved a loan for the power grid operator. (Interfax)
JSC Natsionalnaya Electroset
A decree by Kyrgyzstan’s government on 21 January 2000 determined the JSC Natsionalnaya Electroset (the “national power grid”) as the assignee of the restructured Kyrgyzenergo.
The General Director of Kyrgyzenergo, Bakirdin Sartkaziyev, said that Kyrgyzenergo has been divided into three companies specialising in the production, transportation and distribution of power.
Specifically, Natsionalnaya Electroset will be the power transportation company, as it has inherited the dispatching unit and high-voltage grid of 110 kV and above, as well as some segments of 35 kV lines of “national significance”. The distributor function was given to the JSC Electroraspredelitelnaya Kompaniya (the “power-distribution company”) which was formed on the basis of Kyrgyzenergo’s distribution network. The generation function has been given to JSC Electricheskiye Stantsii (the “power stations”), which embraces all of Kyrgyzenergo’s power and heat plants.
According to Mr Sartkaziyev, the controlling stakes of the newly created companies will be transferred to the management of JSC Natsionalnaya Electroset.
The creation of the new companies will be officially announced to shareholders at a shareholders’ meeting scheduled for April 2000. In 1999 Kyrgyzenergo produced 13.1 billion kWh, exceeding its target. A total of 2 billion kWh was exported to Kazakhstan, Uzbekistan and Tajikistan. The state holds 81.72% of Kyrgyzenergo’s shares. (Interfax)