Air Astana valued at $847mn in London and Astana IPO

Air Astana valued at $847mn in London and Astana IPO
IPO valued the airline group at around $847mn, making this the largest privatisation in Kazakhstan to date with significant involvement from local investors. / Air Astana
By bne IntelliNews February 16, 2024

Air Astana Group, the leading airline group in Central Asia and the Caucasus regions in terms of revenue and fleet size, announced in a statement on February 15 that it has successfully completed its initial public offering (IPO), marking the largest privatisation in Kazakhstan to date with significant involvement from local investors.

The IPO, conducted simultaneously on three stock exchanges  the Kazakhstan Stock Exchange, Astana International Exchange and London Stock Exchange — had a total deal size of approximately $370mn (assuming full exercise of the over-allotment option), valuing the group at around $847mn.

The IPO garnered overwhelming interest, with substantial support from both local Kazakh investors, including retail and institutional investors, as well as the international investor community, Air Astana said. Local investors accounted for 58% of the offering, while international investors held 42%.

Demand from the local market exceeded $483mn, with approximately 60,000 orders from retail investors totaling around $216mn, the statement said. Retail investors received approximately 53% of their total demand. Kazakh institutional investors, including pension funds, received about 38% of their total demand, while international investors received around 25% of their total demand in the offering.

To ensure fairness, retail investors' orders of $30,000 or below were allocated in full, with a pro-rata allocation for orders exceeding $30,000 based on the remaining amount, the statement noted. As a result, 97.8% of orders from retail investors were allocated in full.

Among the investors was the European Bank for Reconstruction and Development (EBRD), which injected $41.99mn (€39.02mn) into Air Astana shares, translating to a 5% stake. 

As part of the IPO, the group raised $120mn in primary proceeds to expedite its growth trajectory. Existing shareholders, including Samruk-Kazyna and Kazakhstan’s Sovereign Wealth Fund as well as BAE Systems (Kazakhstan) Limited, sold shares (or GDRs representing shares), reducing their shareholdings to 41.0% and, assuming full exercise of the over-allotment option, 15.3% respectively.

Air Astana CEO Peter Foster commented: “This is a momentous occasion in the history of Air Astana as we officially become a public company. This IPO has been carefully constructed to ensure Kazakh investors receive the majority of the offering while also raising capital from the international markets. We are delighted to have achieved this following exceptionally strong levels of demand from both institutions and retail investors. Such has been the level of interest that the IPO was multiple times oversubscribed despite upsizing the offering to meet demand.

“Air Astana has come a long way since our maiden flight twenty two years ago. We have embarked on an extraordinary journey to become the largest airline in Central Asia and open the skies to millions of citizens across the region. It now gives me great pleasure to welcome on board our new shareholders as we share in the next stage of our growth story,” he added.