Bank Linked to Kazakh Leader Buys Kcell Stake After Share Slump

(Bloomberg) -- A financial group linked to Kazakhstan’s first president, Nursultan Nazarbayev, bought a stake in what was once the most expensive mobile operator in the post-Soviet equities universe, after the share price plunged by half this year.

Jusan Bank bought a 9.08% stake in Kcell offered by state-run Kazakhtelecom on the stock market, the lender’s spokesman Kuat Dombay said by phone Thursday. Earlier in the day, Kazakhtelecom said it was offering a 24% stake to “a wide range of investors in open trading” and would maintain controlling ownership. It wasn’t immediately clear who else acquired shares. 

Shares dropped as much as 14% in Almaty, the biggest decline since April 2015, before narrowing losses, while trading volumes jumped to almost 220 times the three-month average, according to data compiled by Bloomberg. Kcell’s share price has fallen by more than 50% since its peak in January, cutting its market capitalization to 259 billion tenge ($609 million)

The weighted average price for the stock came in at 1,152.03 tenge ($2.71) a share as of 1:20pm in Almaty, according to the Kazakhstan Stock Exchange. Shares were last trading at that level in the first half of 2017, a year before Kazakhtelecom bought out Telia Co.’s 75% stake for 166 billion tenge.

Jusan has been considering an acquisition of Kcell to expand its online banking services since at least February, according to people with knowledge of the matter at the time. Kcell also announced it planned to delist its GDRs from London, which it completed in June, a week before its price decline accelerated.

Jusan group, which is majority owned by a fund founded by Kazakh leader-for-life Nazarbayev, has been buying banking and telecoms assets over the past year as it aims to challenge the country’s biggest online lender and marketplace, Kaspi.kz. 

In December, it bought ATF Bank from the son-in-law of the head of Samruk-Kazyna, the nation’s sovereign wealth fund, and this month, it agreed to acquired Asian-Pacific Bank from Russia’s central bank. Including its lender Jusan, the group has the fourth-largest banking assets in the country. In January, it also purchased about 90% of KazTransCom, which owns some 7,000 kilometers of fiber-optic lines.

©2021 Bloomberg L.P.