Privatisation in Kazakhstan

Kazakhstan's privatisation programme

Much of Kazakhstan's privatisation pipeline runs through Samruk-Kazyna — the sovereign wealth fund holding state stakes in Kazakhstan's largest enterprises across energy, mining, telecoms, transport, and financial services. Samruk-Kazyna conducts competitive disposal processes for its portfolio companies — through public tenders, IPOs on the Kazakhstan Stock Exchange (KASE), and direct negotiated sales.

Acquisition routes

Foreign investors can participate in Kazakhstani privatisation through: direct share acquisition via government tender or negotiated sale; participation in IPOs and SPOs on KASE; acquisition of assets from state-owned enterprises; and PPP arrangements for infrastructure assets. Bond Stone advises on the most appropriate route based on the target, investor profile, and investment objectives.

Due diligence — privatisation-specific risks

Privatisation transactions require specific due diligence beyond standard corporate review — confirming the lawfulness of any prior privatisation steps, reviewing post-privatisation investment obligations that may bind the acquirer, assessing environmental liabilities from Soviet-era industrial operations, and identifying state or municipal claims against the target.

Post-privatisation investment obligations

Purchasers in Kazakhstani privatisation transactions often assume investment obligations — minimum capital expenditure commitments, employment preservation requirements, and operational continuity conditions. Failure to meet post-privatisation obligations may result in rescission of the sale or financial penalties. Bond Stone reviews and negotiates post-privatisation obligations before transaction completion.

BIT protection for privatisation investors

Foreign investors in privatised enterprises may have treaty protection if a bilateral investment treaty in force covers them. Kazakhstan has signed BITs with many states, not all of them in force. Bond Stone advises on maximising available BIT protections through appropriate investment structuring and on the interaction between Kazakhstani investment law guarantees and BIT protections.