On Friday, Air Astana declared its intention to proceed with its initial public offering (IPO) in both London and Kazakhstan, capitalizing on the surge in travel demand following the pandemic.
The airline, jointly owned by the UK’s BAE Systems and the sovereign wealth fund of Kazakhstan, aims to generate $120 million (£94 million) through the IPO.
This capital injection is designated for the airline’s expansion plans, which include enhancing air travel services and extending its reach into new regions such as China and the Middle East.
This move represents a positive development for London’s stock market, which has recently faced challenges in attracting new listings.
The last quarter of the previous year saw no new listings in London, amidst a slowdown in deal-making activities. Analysts remain sceptical about a significant market recovery in 2024.
Air Astana, the leading airline in Central Asia and the Caucasus, transports 8 million passengers annually with its 49 aircraft fleet.
The company, which also operates FlyArystan, Kazakhstan’s budget airline, has experienced a significant resurgence in travel post-Covid restrictions, with its passenger count exceeding the pre-pandemic levels of 2019.
Peter Foster, President and CEO of Air Astana, informed the Financial Times that a dual listing in Kazakhstan and a major global market was always part of the plan, with London being the unequivocal choice.
He cited London’s strong corporate governance framework, high liquidity, and BAE Systems’ connections to the city as key factors making the UK a desirable location for the listing.
Initial discussions about listing in London began in 2018 for Air Astana but were delayed due to the Covid-19 pandemic and the conflict in Ukraine.
The company plans to list its shares on both the London Stock Exchange and the Astana International Exchange, as well as the Kazakh Stock Exchange.
Founded in 2002, Air Astana has not disclosed the percentage of the company that will be available for purchase in the listing.
This IPO could result in a significant financial gain for BAE Systems, which holds a 49% stake in Air Astana. BAE initially invested $8.5 million in the early 2000s to help launch the airline, a move initiated by Sir Richard Evans, then chairman of BAE, at Kazakhstan’s request.
A spokesperson for BAE stated, “Air Astana is a flourishing, well-run enterprise. We are backing the group’s exploration of a potential IPO as part of an investment strategy to boost its next phase of growth and ensure the airline’s ongoing success.”
