The European Bank for Reconstruction and Development (EBRD) has invested USD41.99 million in Air Astana (KC, Astana Nursultan Nazarbayev) as shares in the Kazakh carrier’s initial public offering (IPO) began trading in London, Astana, and Almaty this week. The EBRD now holds a 5% stake in the company. Kazakhstan’s central bank, meanwhile, revealed on February 15 that it spent KZT24.9 billion tenge (USD55.5 million) on a 6.5% stake.

Air Astana has said that the funds from the dual IPO will be deployed to support fleet expansion and renewal - to 80 aircraft by 2028 - as well as the construction of a maintenance facility, and the acquisition of a flight simulator.

The EBRD described the IPO as “a significant privatisation benchmark for Kazakhstan’s economy, which is predominantly controlled by the state. The reduction of the state’s ownership to less than 50%, which will be achieved through the IPO, sets an important precedent for the country and the region.” It said it hoped its participation would boost confidence among institutional and private investors considering investments in Central Asia.

The bank, which has already invested about EUR10 billion euros (USD10.7 billion) in the country through various projects, added that it will be working with Air Astana in becoming carbon neutral by 2050 by acquiring new-generation aircraft.

Kazakhstan’s central bank, the National Bank of the Republic of Kazakhstan, said it had bought a 6.5% shareholding as an investment by its Unified Accumulative Pension Fund (UAPF).

The dual IPO - or triple including all bourses - includes concurrent listings on the London Stock Exchange (LSE), the Astana International Exchange (AIX), and the Kazakhstan Stock Exchange (KASE) in Alamty. Shares began trading in London on February 14 and in Kazakhstan on February 15. The total value of the offering amounted to USD350 million and Air Astana’s market capitalisation at the start of trading was around USD850 million.

The IPO comprised a primary offering of shares by Air Astana as well as a secondary offering of shares and global depositary receipts (GDRs) by the existing shareholders, the Kazakh sovereign wealth fund Samruk Kazyna and BAe Systems, undertaken through an offering to international institutional investors outside Kazakhstan and a public offering to retail and institutional investors in Kazakhstan.