TIDM67LN
JSC National Company Kazmunaygas
13 July 2016
13 July 2016
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF
SUCH JURISDICTION
Amendments to NC KMG proposals regarding KMG EP
JSC National Company KazMunayGas ("NC KMG") has written to the
independent non-executive directors of JSC KazMunaiGas Exploration
Production ("KMG EP" or "the Company") ("EP INEDs") informing them
of its intention to increase the offer to purchase Common Shares
and Preferred Shares of KMG EP listed on the Kazakhstan Stock
Exchange and GDRs of KMG EP listed on the London Stock Exchange
(the "Purchase Offer") if the proposals set out in its circular to
shareholders of KMG EP dated 17 June (the "Original Circular") are
passed at the general meeting of shareholders of KMG EP ("EGM") on
3 August 2016.
Specifically, NC KMG intends to increase the consideration for
the Purchase Offer from $7.88 per GDR to $9.00 per GDR and
equivalent increases to $54.00 per Common Share in KZT equivalent
calculated on a daily basis, and $31.55 per Preferred Share in KZT
equivalent calculated on a daily basis. All other terms and
conditions applicable to the Purchase Offer remain as described in
the Original Circular.
NC KMG reiterates that it is not making a takeover offer; no-one
is compelled to sell and NC KMG is not seeking to acquire a
significant additional shareholding. Shareholders currently have an
existing right to exit at 10% below market price in the event of
Charter change, and this right is subject to legal constraints on
volume, with a risk that some shareholders may be disadvantaged.
The exit provided in the proposal is an enhancement of this right
in terms of price and the volume is not capped.
Further, NC KMG intends, subject to approval by the majority of
the EP INEDs, to amend NC KMG's original proposal on the amendment
of the Relationship Agreement between NC KMG and KMG EP such that
NC KMG will not have a veto over future nominations of EP INEDs by
the Nominations Committee of the KMG EP Board. If and when the
majority of the EP INEDs approve this amendment, NC KMG will
publish an updated version of the Original Circular (the "Revised
Circular") and NC KMG will make an appropriate announcement.
The above amendments are made in response to feedback from
minority investors on the proposals outlined in the Original
Circular.
NC KMG is also publishing further supporting information on its
approach to delivering operational improvement in KMG EP and its
responses to issues raised by the EP INEDs following publication of
the Original Circular. These are contained in the presentation
attached to this announcement.
NC KMG's proposals, which will be considered at the EGM in
Astana, Kazakhstan on 3 August 2016, focus on three priorities:
Urgent need to improve operational and financial performance
-- Enhanced powers of KMG EP's Board of Directors to drive
strategy and performance, increasing control over production plans
and cost management
-- Implementation of a business turnaround plan developed by the
KMG Technical and Research Institute, applying international best
practice
-- Closer cooperation and direct access to the resources and expertise of NC KMG
Preserving high standards of corporate governance
-- Proposed changes preserve robust structure and standards of corporate governance
-- The EP INEDs retain clearly defined and enhanced areas of
exclusive competence but lose powers that could frustrate decision
making through bureaucracy
-- Continued NC KMG commitment to supporting KMG EP's public listing
Strengthening key protections for minority shareholders
-- Core protections for minority shareholders maintained and enhanced
-- New powers of approval for EP INEDs over all related-party
transactions and loans with in the Samruk Kazyna Group of
companies
-- Deficiencies addressed in existing KMG EP constitutional
documents to give minority shareholders confidence that their
rights can be enforced
The proposed changes to the Charter of KMG EP and the
Relationship Agreement between NC KMG and KMG EP seek to make KMG
EP more resilient, more cash generative and able to deliver more
value to all of the Company's shareholders by addressing embedded
weaknesses in KMG EP's organisational structure, as highlighted by
the Company's sustained poor operational performance and its
inability to respond effectively to a lower oil price
environment.
NC KMG believes its proposals represent a balanced package of
arrangements that offer the best chance of effecting change at KMG
EP while protecting the rights and the economic interests of all
Shareholders and GDR holders. Without prompt action to improve
operational decision-making and effectiveness, a downturn in the
external environment is likely to have a detrimental impact on KMG
EP's cash position, despite the benefit of a recent rise in
international oil prices.
http://www.rns-pdf.londonstockexchange.com/rns/0347E_-2016-7-13.pdf
Note:
NC KMG, Central Asia's largest oil and gas company, is
Kazakhstan's national operator for exploration, production,
refining and transportation of hydrocarbons. The Company accounts
for 28.6% of oil and 16% of gas production in Kazakhstan and is one
of the country's largest employers, with over 76,000 employees. The
consolidated oil and gas condensate output in 2015 amounted to
22,670 thousand tons, gas production - 7,255 MMcm, 16,317 thousand
tons of oil were sent to the refineries for processing; the proven
oil and gas condensate reserves are 801.2 mn tons. The Company
represents the Government in the oil and gas sector, 90% of it is
owned by the "Samruk-Kazyna" JSC, Kazakhstan's sovereign wealth
fund, and 10% by the National Bank of the Republic of Kazakhstan.
NC KMG has participatory interests in 38 oil & gas businesses
in Kazakhstan and abroad.
Enquiries:
Media enquiries:
Portland
Oliver Pauley +44 (0)207 554 1608
This announcement does not constitute an offer or invitation to
purchase any securities. Any offer (if made) will be made solely by
certain offer documentation which will contain the terms and
conditions of any such offer (if made) and details of how to accept
it.
The purchase offer contemplated in the documentation referred to
in this announcement will be made in compliance with, to the extent
applicable, Regulation 14E ("Regulation 14E") under the US
Securities Exchange Act of 1934, as amended (the "Exchange Act").
NC KMG is analyzing whether any such offer is exempt from certain
of the requirements of Regulation 14E pursuant to Rule 14d-1(c) or
14d-1(d) under the Exchange Act (the "Cross-Border Tender Offer
Exemptions").
In the event that NC KMG determines that such offer is exempt
from certain of the requirements of Regulation 14E pursuant to a
Cross-Border Tender Offer Exemption, it and any covered person may
rely on any exemption or relief provided for by such Cross-Border
Tender Offer Exemption, including any available exemption from the
requirements of Rule 14e-5 that permits brokers undertaking the
offer or their affiliates to acquire, or make arrangements to
acquire, Shares or GDRs outside the United States other than
pursuant to such offer, on or off the Kazakhstan Stock Exchange or
the London Stock Exchange or otherwise, before or during the
timeframe of the offer, so long as those acquisitions or
arrangements comply with applicable Kazakhstan Laws and practice
and the provisions of such exemption. In such event, information
about any such acquisitions or arrangements which is made public in
Kazakhstan will be made available, including in the United
States.
This communication is only being distributed to and is only
directed at persons who are (i) outside the United Kingdom or (ii)
investment professionals falling within Article 19(5) of the
Financial Services and Markets Act 2000 (Financial Promotion) Order
2005 (the "Order") or (iii) persons who are holders of the
Securities or who otherwise fall within Article 43 of the Order or
(iv) high net worth companies, and other persons to whom it may
lawfully be communicated, falling within Article 49(2)(a) to (d) of
the Order or (v) any other persons to whom this communication may
lawfully be communicated (all such persons together being referred
to as "relevant persons"). Any person who is not a relevant person
should not act or rely on this document or any of its contents.
This announcement, including information included in the
documentation referred to in this announcement, may contain
"forward-looking statements" concerning NC KMG. All statements
other than statements of historical facts included in this document
may be forward looking statements. Without limitation, any
statements preceded or followed by or that include the words
"targets", "plans", "believes", "expects", "aims", "intends",
"will", "may", "anticipates", "estimates", "projects" or words or
terms of similar substance or the negative thereof, are forward
looking statements. Such forward looking statements involve risks
and uncertainties that could significantly affect expected results
or outcomes and are based on certain key assumptions. Many factors
could cause actual results or outcomes to differ materially from
those projected or implied in any forward looking statements. Due
to such uncertainties and risks, readers are cautioned not to place
undue reliance on such forward looking statements, which speak only
as of the date hereof. NC KMG assumes no obligation and does not
intend to update these forward-looking statements, except as
required pursuant to applicable law.
This information is provided by RNS
The company news service from the London Stock Exchange
END
NRAGLGDRGSBBGLX
(END) Dow Jones Newswires
July 13, 2016 02:45 ET (06:45 GMT)
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