Kcell Announces Admission to The Official List and Commencement of Unconditional Dealings on The Main Market of The London Stock Exchange




This announcement does not constitute or form part of any offer for sale or subscription of or solicitation to buy or subscribe for any securities, and neither this announcement nor any part of it shall form the basis of or be relied on in connection with or act as an inducement to enter into any contract or commitment whatsoever.


This announcement is an advertisement and not a prospectus. Investors should not purchase or subscribe for any transferable securities referred to in this announcement except on the basis of information in the prospectus to be published by Kcell Joint Stock Company in due course in connection with the admission of its common shares to the official list of JSC “Kazakhstan Stock Exchange” (the “KASE”), as well as  in connection with the admission of its global depositary receipts to the official list of the United Kingdom Listing Authority and to trading on the London Stock Exchange plc’s (the “LSE”) main market for listed securities.


                                                                                  17 December 2012


Kcell Announces Admission to The Official List and Commencement of Unconditional Dealings on The Main Market of The London Stock Exchange


Kcell Joint Stock Company (“Kcell” or the "Company"), the leading provider of mobile telecommunications services in Kazakhstan by market share in terms of revenue and subscribers, announces today that its global depository receipts (“GDRs”) have been admitted to the Official List of the UK Listing Authority and to trading on the London Stock Exchange's main market.


Unconditional dealings in Kcell’s GDRs commence at 8am today under the symbol KCEL.


Trading in common shares of Kcell commenced on the Kazakhstan Stock Exchange on 13 December 2012 under the symbol KCEL.


Credit Suisse, UBS Investment Bank and Visor Capital are acting as joint global coordinators and joint bookrunners of the Global Offer. Renaissance Capital is acting as a joint bookrunner and Halyk Finance is acting as a co-manager of the Global Offer. The Domestic Offer is being led by Visor Capital.


For further information contact:


International Media

College Hill

Leonid Fink, Tony Friend, Kay Larsen                                                               +44 207 457 2020


Kazakhstan Media

United Agencies

Olesya Beruashvili                                                                                           +7 (727) 292 16 01


Swedish Media


Press office                                                                                                     +46 771 77 58 30

Company Overview


Kcell is the leading provider of mobile telecommunications services in Kazakhstan by market share in terms of revenue and the number of subscribers. It has operated since 1998, and as of 30 September 2012 it had approximately 12.7 million subscribers, representing a market share of 47.7%, as estimated by the Company. Its estimated market share in terms of revenue was 57% for the year ended 31 December 2011.

Kcell provides mobile voice telecommunications services, value-added services such as short message services, multimedia messaging services and mobile content services, as well as data transmission services including internet access. It has two brands: the Kcell brand, which is targeted primarily at corporate subscribers (including government subscribers), and the Activ brand, which is targeted primarily at mass market subscribers. The Company offers its services through its extensive, high quality network which covers substantially all of the populated territory of Kazakhstan.


For the year ended 31 December 2011, the Company generated revenue of KZT 178,786 million (c.US$1,193.0 million[1]); EBITDA for 2011 was KZT 105,794 million (c.US$706.0 million), representing a margin of 59.2%; and profit for the year was KZT 66,858 million (c.US$446.1 million). For the nine months ended 30 September 2012, the Company generated revenue of KZT 133,104 million (c.US$888.2 million); EBITDA for the period was KZT 74,503million (c.US$497.2 million), representing a margin of 56.0%; and profit for the period of KZT 46,072 million (c.US$307.4 million).


Kcell benefits from operating in the fast growing emerging economy of Kazakhstan. In 2011 Kazakhstan’s real GDP growth was 7.5%, according to the Economist Intelligence Unit (EIU). Real GDP per capita has been growing at a compound annual growth rate of 5.9% since 2009 to reach US$11,491 in 2011, according to the EIU, while Kazakhstan’s unemployment rate declined from 6.6% in 2009 to 5.4% in 2011. As at 31 December 2011, Kazakhstan had a positive trade balance of US$47.3 billion with foreign direct investments of US$12.9 billion, according to the EIU.


The Company is controlled by TeliaSonera AB, one of Europe’s largest telecommunication companies and a strong international telecoms operator with many years of successful experience in managing mobile telecoms and a pioneer in innovation and technology. Prior to the Offering, TeliaSonera AB held 49% of Kcell directly and 37.9% indirectly through Fintur Holdings B.V. (“Fintur”), a company jointly owned by TeliaSonera AB and Turkcell İletişim Hizmetleri A.Ş, resulting in a total effective ownership of 86.9%. Sonera Holding B.V., a 100% subsidiary of TeliaSonera AB, acquired its 49% holding from Kazakhtelecom JSC in 2012.


The board of directors of Kcell is comprised of six members, including two independent directors Jan Erik Rudberg and Bert Åke Stefan Nordberg. Jan Erik Rudberg is also the chairman of the board of directors of the Company.


Kcell plans to benefit from the significant growth potential for mobile data services in Kazakhstan. The Company intends to continue to invest in the deployment of its 3G network to expand coverage. Kcell aims to maintain its market leadership in terms of revenue and the number of subscribers by offering its products and services at competitive prices, expanding its offering of products and services, maintaining the high quality of its network and enhancing its brand value.


Dividend policy


The Company’s dividend policy is governed by the Company’s corporate governance code approved by the general meeting of shareholders on 17 October 2012. This dividend policy will apply to dividends to be declared by the Company after the declaration of the special dividend described below. Unless the Company’s shareholders decide otherwise, annual dividends on common shares of the Company shall be at least 70% of the Company’s net income for the previous financial year. When making decisions on payment of dividends, the general meeting of shareholders will take into consideration the proposal of the Company’s board of directors as to the amount of such dividends that shall be based on the Company’s best interests, cash on hand, cash flow projections and investment plans in the medium term perspective, as well as capital market conditions.


The Company’s current intention is to declare and pay a special dividend in the second quarter of the financial year ending 31 December 2013 in an amount referable to 100% of the net income of the Company for the period 1 July 2012 to 31 December 2012. This special dividend will be paid to shareholders of the Company pro rata to their shareholdings as at a record date to be set within the second quarter of 2013.


There is, however, no guarantee that the Company will declare and pay dividends in accordance with the foregoing policy or as stated above. In practice, the payment of dividends will depend upon a number of factors and is subject to various contingencies.



Important Notice

This press release does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with, any contract therefore. The offer and the distribution of this press release and other information in connection with the listing and offer in certain jurisdictions may be restricted by law and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

This communication is only directed at (i) persons who are outside the United Kingdom or (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order or (iv) other persons to whom it may lawfully be communicated (all such persons together being referred to as "relevant persons"). The offered securities are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this communication or any of its contents.

This press release is not an offer to sell nor a solicitation to buy any securities nor a prospectus for the purposes of EU Directive 2003/71/EC (together with any applicable implementing measures in any Member State, the "Prospectus Directive") as may be amended from time to time. This communication is only addressed to qualified investors in that Member State within the meaning of the Prospectus Directive. A prospectus will be prepared and made available in accordance with the Prospectus Directive if any securities are issued and, when published, will be obtainable in accordance with the Prospectus Directive. Investors should not subscribe for or purchase any securities referred to in this press release except on the basis of the information contained in the prospectus to be published by the Company in due course relating to the securities. The expression “Prospectus Directive” means Directive 2003/71/EC (and amendments thereto, including Directive 2010/73/EU, to the extent implemented in any relevant Member State) and includes any relevant implementing measure in the relevant Member State.

This press release may not be published, distributed or transmitted in or into the United States. This press release does not constitute an offer to sell or the solicitation of an offer to buy the securities discussed herein. The securities mentioned herein have not been, and will not be, registered under the United States Securities Act of 1933 (the "Securities Act") and may not be offered or sold in the United States unless they are registered under the Securities Act or pursuant to an exemption from registration. There will be no public offering of the securities in the United States.

Certain statements included herein may constitute forward-looking statements that involve a number of risks and uncertainties. Such forward-looking statements are based on numerous assumptions regarding the Company’s present and future business strategies and the environment in which the Company will operate in the future. Forward-looking statements are not guarantees of future performance. These forward-looking statements speak only as at the date of this release. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.

[1] The functional currency of the Company is Kazakhstan Tenge. Translations of Kazakhstan Tenge amounts into U.S. dollars are given solely for the convenience of the reader as at 30 September 2012 at the exchange rate of KZT 149.86 to  one U.S. dollar, which was the official exchange rate quoted by the National Bank of Kazakhstan on 30 September 2012.