KAZAKHTELECOM: Kcell's IPO Success to Determine Additional Proceeds

11/30/2012
Mandatory IPO for Kcell. On 29 Nov, TeliaSonera announced the valuation range for the IPO of its Kazakh mobile subsidiary, Kcell. The latter’s equity value is estimated at $2.1-2.6bn and 25% will be listed in both London and Kazakhstan. TeliaSonera acquired 49% of Kcell from Kazakhtelecom for $1.5bn in 1Q12, which implied a $3.1bn valuation. Kcell’s IPO is dictated by an agreement between Kazakhtelecom and TeliaSonera, in which Kcell is required to list its equity by 1Q13.

Kazakhtelecom: cheap valuation.
Kazakhtelecom trades at a FY12E EV/OIBDA of 2.1x and P/E of 6.8x (Aton estimates). In our view, Kazakhtelecom should remain a good BUY opportunity for the next one-to-three years.


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