20 Nov 2023 15:59

Kazakhstan in negotiations with Vietnam's Sovico Group to sell Qazaq Air

ASTANA. Nov 20 (Interfax) - Kazakhstan is holding negotiations with the Vietnamese Sovico Group on the sale of Qazaq Air, Kazakh Transport Minister Marat Karabaev said at a briefing on Monday.

"We are talking about the sale of Qazaq Air; attracting an international player there. These are complex issues. Literally this morning we held a meeting with a foreign company. (...) We are discussing this in greater detail with the Vietnamese company, the Sovico Group of companies," Karabaev said.

He added that negotiations are ongoing, including covering the company's debts.

"The complex structure of the talks is related to Qazaq Air's debts. The cost of Qazaq Air is 10 billion [tenge], plus the company has debt. We are talking about covering the debt and plus the cost of the company itself," the minister said, emphasizing that "this is a process under discussion, and not a final decision." The minister did not say how much debt there was.

He noted that the potential buyer "is focused not only on low-cost airlines, but also is also asking for support for flights outside of Kazakhstan."

On August 18, 2023, the Kazakhstani Samruk-Kazyna state fund announced the launch of bidding for the sale of from 49% to 100% of the shares of Qazaq Air. The acceptance of applications was to end on September 28, while the results of the two-stage competition were planned to be announced on December 15, 2023. Then, the deadline for accepting applications was extended several times, most recently until November 13.

On November 14, it became known that Samruk-Kazyna had declared the competition invalid.

The starting price was set at 10.2 billion tenge.

Qazaq Air was created in 2015, is 100% owned by the Samruk-Kazyna state fund, and has about a 7% share of the Kazakhstan aviation market. The airline's fleet consists of five Bombardier DHC-8-Q400NG aircraft. At the end of 2022, the airline's revenue was 20.4 billion tenge, with EBITDA of 3.9 billion tenge.

Sovico Group is one of the largest diversified conglomerates in Vietnam, operating in the energy, construction, banking and finance sectors, as well as the aviation industry. In 2022, the company had revenue of $20.6 billion.

The official exchange rate as of November 20 is 462.79 tenge/$1.