Kcell reveals details of December IPO

Kazakhstan’s largest mobile operator, Kcell, expects its IPO to raise between $525 and $650 million when it floats 25% of its shares next month.

The operator is hoping for strong investor interest after a disappointing debut listing from Russian operator MegaFon this week.

The London and Almaty listing has a price range of $10.50 to $13.00 per global depositary receipt indicating a lower value than when TeliaSonera paid $1.52 billion for a 49% stake in Kcell in February.

Kcell said that the indicated price range would value the company between $2.1 billion and $2.6 billion, while based on the price TeliaSonera paid it would be worth $3.1 billion and a 25% stake in the firm approximately $775 million, according to Reuters.

Pricing is set to be announced and trading expected to commence on December 12 2012, according to TeliaSonera.

“We are very pleased to have come this far in the process. Kcell is an important part of our global operations and one of the most successful subsidiaries of TeliaSonera. A listing of Kcell will create value for our shareholders through higher liquidity and visibility, as well as through a retained long-term strategic control,” said Lars Nyberg, president and CEO, of TeliaSonera.

Kcell is hoping to attract investors through offering generous dividends and the growing adoption of smartphones.

The operator has around 48% market share in wireless in Kazakhstan, with nearly 12.7 million subscribers recorded in September, according to TeleGeography. The company generated revenues of $1.19 billion last year with a net profit of $446 million.

Once the IPO is complete TeliaSonera’s effective ownership of Kcell will have dropped from 86.9% to 61.9%. The company will also retain the option to buy back 10% of the global depositary receipts on offer.

TeliaSonera will receive around $1.3 billion from this week’s IPO of MegaFon after reducing its stake in the operator.