TIDM67LN
JSC National Company Kazmunaygas
18 July 2016
18 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
NC KMG Proposals for KMG EP: Factual update
JSC National Company KazMunayGas ("NC KMG") wishes to correct
misrepresentations made by the independent non-executive directors
of KMG EP JSC KazMunaiGas Exploration Production ("KMG EP" or "the
Company") ("EP INEDs") in their statement of 18 July so that
minority shareholders of KMG EP ("Minority Shareholders") can reach
a fair and balanced view on the proposals contained in the Revised
Circular published by NC KMG on 14 July (the "Proposals) based on
accurate information.
NC KMG's advisers informed the advisers of KMG EP over the
weekend that the current Proposals are certain and final, and will
not be revised further.
Certainty of the Purchase Offer associated with the
Proposals
Contrary to the opinion of the EP INEDs, there is no uncertainty
over 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")
associated with the Proposals. The Purchase Offer is conditional
only on the acceptance by Minority Shareholders of the proposed
changes to the Charter and the Relationship Agreement.
The force majeure provision, which is customary for offers of
this nature, was discussed with the EP INEDs' advisers before
publication and amended in line with their comments. It is
explicitly designed only to cover events outside NC KMG's control
that make it impossible for the Purchase Offer to be completed,
such as closure of the markets or war. Access to funding is
specifically excluded from the force majeure definition. The force
majeure definition is reproduced in full in the notes below for the
convenience of readers.
In the extremely unlikely event that the force majeure provision
was invoked, the changes to the Relationship Agreement and Charter
would not take effect until the Purchase Offer was completed, so
Minority Shareholders are fully protected in all circumstances.
2014 offer
The EP INEDs also refer to the withdrawal of a full buyout offer
at $18.50 per GDR by NC KMG made in 2014. NC KMG was prepared to
honour these commitments for six months (during which time they
were not put to shareholders by the EP INEDs) while international
oil prices halved. The offer was ultimately withdrawn after failure
to reach agreement with the EP INEDs on price.
Performance of KMG EP
NC KMG also notes the comments of the EP INEDs on 18 July
regarding the Statement of Operating Profit for the five months
ended 31 May 2016, and the assertion by the EP INEDs that the
Revised Circular may cause confusion among Minority Shareholders
concerning the current profitability of KMG EP's operations.
NC KMG notes that the operating results do not appear to include
any income tax expense for the period and, from a free cashflow
perspective, appear to ignore expenditures on maintenance capital
expenditures at both Embamunaigas JSC and Ozenmunaigas JSC.
Furthermore the released information does not appear to include the
performance of the Joint Ventures and Associates, so it remains
unclear whether KMG EP is generating positive cashflows.
Note:
1. Full text of the Force Majeure definition
Force Majeure Event means an event beyond the control of the
Offeror which prevents it from complying with any of its
obligations under the Purchase Offer. For the avoidance of doubt,
such event would be deemed to have occurred only if it makes it
legally and/or practically impossible for the Offeror to comply
with any of its obligations under the Purchaser Offer and may
include, for instance, any general suspension of, or limitation on
prices for, trading in securities in Kazakhstan, the United
Kingdom, the United States or foreign securities or financial
markets; a declaration of a banking moratorium or any suspension of
payments in respect of banks in Kazakhstan, the United Kingdom, the
United States or elsewhere; a commencement or declaration of war,
armed hostilities, terrorist acts or other national or
international calamity directly or indirectly involving Kazakhstan,
the United Kingdom, the United States or any country in which
either the Company or any of its subsidiaries conducts its
business; any steps, any corporate action or any legal proceedings
instituted or threatened against the Company in respect of its
winding-up, dissolution, examination or reorganisation or for the
appointment of a receiver, examiner, administrator, administrative
receiver, trustee or similar officer of all or any part of its
assets or revenues, or any analogous proceedings in any
jurisdiction. For the avoidance of doubt, a Force Majeure Event
shall not include the failure of the Offeror to obtain funding from
a third party in order to proceed with the Purchase Offer.
2. About NC KMG
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
NRAAKFDDOBKDFOD
(END) Dow Jones Newswires
July 18, 2016 13:23 ET (17:23 GMT)
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