Air Astana Group has confirmed its long-delayed initial public offering (IPO) is set to go ahead on the London and Kazakhstan stock exchanges, which is likely to include a sale of existing shares and global depositary receipts (GDRs) held by BAE Systems PLC (LSE:BA.).
Shares in FTSE 100-listed BAE rose 1.6% to 1,182.94p on Friday.
Air Astana said in an announcement today that it intends to publish a registration document for an IPO of its GDRs on the London Stock Exchange as well as an offering on the Astana International Exchange (AIX) in Kazakhstan in the form of shares and GDRs.
The offering is expected to comprise an issue of new shares and GDRs as well as the sale of those held by BAE Systems (Kazakhstan) Ltd and the Kazakhstan sovereign wealth fund.
Air Astana Group, which was rumoured to have been looking at a London float in 2018, could potentially fetch a valuation of roughly US$1 billion based on preliminary estimates, according to media reports last year.
If the valuation is anywhere near this amount it would result in BAE getting a potential windfall on its 49% stake, which the company confirmed had a carrying value of £63 million on its books as at 31 December 2022 – but this was 49% of Air Astana’s net assets and "not related to a potential valuation of the IPO".
The stake dates back to a botched defence technology deal more than 20 years ago, with the British company having invested US$8.5 million to co-fund the launch of the airline in 2002 as part of an attempt to sell radar systems to Kazakhstan, though this was later kiboshed by Russia.
As one of the fastest-growing airline groups in the world, it has grown to become the largest airline group in Central Asia and the Caucasus, carrying six million passengers via its full-service airline Air Astana and low-cost carrier FlyArystan in the first nine months of 2023.
President and chief executive Peter Foster said: "Our intention to list in London and Kazakhstan demonstrates the strong foundations of the Air Astana Group and the exciting prospects to increase air travel across our key markets.
"We are confident that the initial public offering will accelerate the next stage of growth for the Air Astana Group, and we see significant opportunities to thicken our existing routes and expand into new geographic areas, supported by our continued fleet expansion plan and initiatives to increase operational flexibility."
A BAE Systems spokesperson said: “Air Astana is a thriving, well-managed business. We’re supporting the group’s plans to explore a potential initial public offering as part of the investment strategy to accelerate its next growth phase and support the airline’s continued long-term success.”