Kazakhstan’s KazMunayGas receives asset-sale waiver for seven notes

New York, March 31 – JSC National Co. KazMunayGas received the requested waiver from holders of seven series of notes issued by KazMunaiGaz Finance Sub BV.

The waiver allows the company to sell all or a significant portion of its stake in KazMunayGas International NV by lifting the requirement that it hold 75% of the capital stock of that subsidiary.

Noteholders were also asked to amend the note terms to increase the basket for a judgment event of default to $50 million from $10 million.

The judgment clause amendment is “consistent” with KMG’s syndicated and bilateral debt facilities and, “in line with its prior efforts, KMG wishes to align the terms of the notes with parallel provisions across its debt platform,” the company said when it announced the consent solicitation on March 9.

As part of the group’s strategy to focus its operations in Kazakhstan, the company is considering selling its stake in KazMunayGas International NV and would no longer hold the required 75% stake.

The company said it has entered into an agreement with CEFC China Energy Co. Ltd. to sell 51% of its shares in KMG International for $680 million.

The proposed sale is expected to reduce the company’s consolidated debt by about $600 million.

The notes covered by the consent solicitation are KazMunaiGaz’s $1.6 billion of 9 1/8% notes due 2018, $1,371,437,000 of 7% notes due 2020, $1,130,274,000 of 6 3/8% notes due 2021, $406,564,000 of 4.4% notes due 2023, $123,177,000 of 4 7/8% notes due 2025, $512,249,000 of 5¾% notes due 2043 and $30,112,000 of 6% notes due 2044.

Meetings were held on Friday in London starting at 5 a.m. ET and following at 15 minute intervals.

Holders of each series of notes approved the company’s request.

As previously announced, noteholders who submitted electronic voting instructions or forms of sub-proxy in favor of the measure by 5 p.m. ET on March 21, the early consent date, will receive the early consent fee of $2.00 per $1,000 principal amount.

The consent solicitation remained open until 11 a.m. ET on March 29. Settlement is planned for April 7.

The solicitation agents are Deutsche Bank AG, London Branch (+44 20 754 76568 or +44 20 7545 8011) and UBS AG, London Branch (+44 20 7568 2133, 203 719-4210, 888 719-4210 or ol-liabilitymanagement-eu@ubs.com).

The tabulation agent is Lucid Issuers Services Ltd. (+44 20 7704 0880 or kmg@lucid-is.com).

KazMunayGas is an Astana, Kazakhstan-based state-owned oil and gas company.

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