Air Astana Targets Dual IPO in London and Almaty for Expansion Funding

Air Astana, the flag carrier of Kazakhstan, has announced plans for a dual initial public offering (IPO) on both the London and Kazakhstan stock exchanges. The airline aims to raise approximately USD 120 million through this offering, involving both of its shareholders: the Samruk Kazyna Sovereign Wealth Fund and BAe Systems, a British aerospace and defense company. BAe Systems currently holds a 49% stake in Air Astana, while Samruk-Kazyna owns the remaining 51%.

The fundraising initiative is designed to support Air Astana’s growth strategy. It will include the issuance of new shares and global depositary receipts (GDRs), with each GDR representing four shares. The IPO will involve a global offer of GDRs in London and a concurrent domestic offer in Kazakhstan, comprising shares and GDRs.

Peter Foster, CEO of Air Astana, highlighted that this move is set to accelerate the airline’s next growth phase, with plans to expand existing routes and explore new geographic areas. The airline’s growth will be supported by ongoing fleet expansion and operational flexibility initiatives.

Air Astana’s IPO process is expected to commence with book building and a roadshow around the end of January 2024, although a specific timeline beyond that has not been provided. The Air Astana Group comprises two distinct brands: the full-service Air Astana and the low-cost carrier FlyArystan.

The group operates a fleet of 49 aircraft, including a variety of Airbus and Boeing models, and has committed to acquiring 22 more aircraft by 2026. The goal is to expand the fleet to 80 aircraft by the end of 2028. FlyArystan is also working on obtaining its own air operator’s certificate (AOC) and plans to double its fleet size by 2027.

This IPO announcement follows previous plans to go public, which were initially set for 2013 and later for 2016, with a deferment until at least 2025 reported in late 2021. Additionally, last week, Samruk-Kazyna launched a second open tender for the sale of a stake in another state-owned carrier, Qazaq Air, following an unsuccessful first attempt.

The dual IPO of Air Astana signifies a strategic move to secure funding for expansion and strengthen its position in the competitive global aviation market. The success of this offering will be a crucial factor in the airline’s ability to achieve its ambitious growth objectives.