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Revised Circular and Shareholder Letter on KazMunayGas EP

JSC National Company KazMunayGas has published on July 14, 2016, an updated version of its circular to shareholders of JSC KazMunaiGas Exploration Production.

Revised Circular and Shareholder Letter on KazMunayGas EP Revised Circular and Shareholder Letter on KazMunayGas EP




JSC National Company KazMunayGas («NC KMG») has published on July 14, 2016, an updated version (the «Revised Circular») of its circular to shareholders of JSC KazMunaiGas Exploration Production.

The Revised Circular contains the amendments announced by NC KMG on 13 July 2016, namely that:
- NC KMG will increase the consideration for 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»), in the event that the proposals in the Revised Circular are accepted, 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. This is a firm offer to buy all shares that are offered to KMG NC and is not conditional on anything apart from the proposed changes in the Charter and Relationship Agreement being approved. In the event that NC KMG fails to meet its obligations under the Purchase Offer in full following approval of the proposals contained in the Revised Circular, none of the proposals will take effect.
- NC KMG will not have a veto over future nominations of EP INEDs by the Nominations Committee of the KMG EP Board, to ensure that minority investors can have the maximum possible confidence in the full independence of the EP INEDs in future.


The Revised Circular will be voted on at the general meeting of shareholders of KMG EP («EGM») in Astana, Kazakhstan on 3 August 2016.
NC KMG reiterates again that this is not a buyout offer; that it is not seeking a significant increase in its stake; and that it is committed to maintain the listing of KMG EP.


Finally, NC KMG is publishing a letter to all shareholders in KMG EP, as NC KMG has been denied access to the full shareholder register of KMG EP. This letter contains three commitments to KMG EP Shareholders concerning NC KMG’s approach to its role as the majority shareholder in KMG EP in future:
1. If and when KMG EP achieves a positive operational result, whether as a result of our proposed turn around program and/or an improvement in the oil price environment, KMG EP will resume paying dividends at a minimum level of 15% of that result.
2. Moreover, if such a result is triggered by an improvement in the operational practices of KMG EP, NC KMG will support the acquisition by KMG EP of further assets and exploration acreage.
3. Finally, in the event that NC KMG’s proposed changes to the Relationship Agreement and Charter are accepted, and the independent non-executive directors of KMG EP JSC KazMunaiGas Exploration Production («KMG EP» or «the Company») («EP INEDs») EP INEDs resign as they have announced they will (or indeed if NC KMG’s proposals are declined and KMG EP INEDs leave for other reasons) then NC KMG proposes to form a committee made up solely of minority shareholders to identify three new INEDs for EP whom minority shareholders consider suitable and who have their trust.


The Revised Circular is attached to this announcement.

Source : Neftegaz.RU