RAZVEDKA DOBYCHA KAZMUNAYGAZ AO KazMunayGaz is now offering $9.00 per global depository receipt of Kazmunaigas Exploration and Production
KazMunayGaz made the offer as part of a broader proposal to amend KMG EP's charter and an agreement governing the relationship between the two companies.
On Wednesday, KazMunayGaz also said it would amend its proposal so that KazMunayGaz will not have a veto over future nominations of KMG EP independent non-executive directors.
It said the amendments were made in response to feedback from minority investors in KMG EP.
KazMunayGaz Chairman Frank Kuijlaars told the Financial Times on Wednesday that giving up the veto was a concession to Chinese sovereign wealth fund China Investment Corporation which owns about 11 percent of KMG EP common stock.
"That was their number one concern," he said. "We said let’s give in, let’s recognise this. Giving up a veto doesn’t mean you cannot challenge certain decisions."
KMG EP independent directors strongly opposed the original proposal made in June and urged minorities to vote against it at a meeting on Aug. 3.
Upstream-focused KMG EP is sitting on a cash pile of more than $3 billion, while its indebted parent narrowly averted default last year. Kazakhstan's central bank effectively printed the equivalent of $4 billion to bail it out.
Floated 10 years ago, KMG EP enjoys a high degree of autonomy thanks to the current relationship agreement and the presence of three powerful independent directors on its board.
KMG NC has a 58 percent stake in KMG EP. Minority shareholders, including funds overseen by managers such as BlackRock (>> BlackRock, Inc.), own 34 percent, although some of those are non-voting preference shares.
Eastern neighbour China is one of Kazakhstan's main trading partners and the fourth-biggest foreign investor in the minerals-rich former Soviet republic, after the Netherlands, Britain and the United States.
Total Chinese investment in Kazakhstan stood at $14.7 billion as of March 31, according to Kazakhstan central bank data. That includes a purchase by China National Petroleum Corporation (CNPC) of a stake in the giant Kashagan offshore oil project.
(Reporting by Olzhas Auyezov, editing by Louise Heavens and Adrian Croft)
