Kazakhstan's Kcell mobile telecom services provider to de-list its GDRs

Business Materials 25 February 2021 00:26 (UTC +04:00)
Kazakhstan's Kcell mobile telecom services provider to de-list its GDRs

BAKU, Azerbaijan, Feb. 25

By Nargiz Sadikhova - Trend:

Kcell Joint Stock Company, the leading provider of mobile telecommunications services in Kazakhstan, announced that at its meeting held on February 23, 2021, the Board of Directors approved a decision to convene an Extraordinary General Meeting of shareholders (EGM) on April 9, 2021 to approve the cancellation of the listing of its Global Depositary Receipts (GDRs) on the London Stock Exchange and the Astana International Exchange (AIX) and to terminate the Company’s GDR program (Proposals), Trend reports citing the company.

The company's shares are intended to remain listed on the Kazakhstan Stock Exchange (KASE). Subject to the approval of the Proposals by the shareholders of the Company at the EGM (details of which, together with an explanatory circular, will be announced in due course), it is anticipated that, the company will subsequently give notice to Deutsche Bank Trust Company Americas, acting as depositary of the GDRs, of the termination of the deposit agreement dated October 23, 2012 relating to the GDRs, and that the effective date of the cancellation of the GDR program and of the listing of the GDRs on the LSE and the AIX will be on or around 7 July 2021.

The Board believes that the following factors are relevant when Shareholders and GDR Holders consider the Proposals:

● Maintenance of the listing of the GDRs on the LSE and the AIX, along with the listing of the Company’s common shares ("Shares") on the KASE results in low liquidity levels and fragmented trading patterns of the respective instruments in each of the three exchanges.

● The Board believes that, by reducing the number of markets on which its securities are traded, and the resulting concentration of trading of the Shares on the KASE, will improve liquidity levels and trading patterns.

● The volume of secondary trading in the GDRs observed on the LSE and the AIX is very low and, in the opinion of the Board, limits the potential for additional equity offerings by the Company. The Board is of the opinion that it would be very difficult for the Company to attract any meaningful equity investment in the future through its listing of GDRs. Furthermore, the Company does not have plans to access the international equity capital markets in the near future in view of the Company's funding strategy.

● The Company's costs and management effort required to maintain the Company's status as an LSE and AIX listed company and maintenance of the GDR programme are not justified given the low liquidity of GDR trading on the LSE and AIX, and therefore exceed its benefits. If the Proposals are approved at the EGM, the Company's shares will remain listed on the KASE. GDR holders will therefore have a choice of exiting their investment in the Company or exchanging their GDRs for shares in the Company traded on the KASE. The Board approved the decision to convene the EGM on the initiative of the Company's majority shareholder.

The Company's majority shareholder has indicated its initial interest in supporting the Proposals, subject to a formal decision of its governing bodies.


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