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INITIAL PUBLIC OFFERING Kazakhstan | Uzbekistan | Azerbaijan | Kyrgyzstan | Turkmenistan | Tajikistan | Mongolia |United Kingdom | USA We are delighted to present you our credentials for working as external legal counsel. Should you have any queries or require clarification regarding any of the specific points raised in this presentation, please do not hesitate to contact us. Contents Overview Finance & Securities products Our IPO experience IPO: possible options IPO: corporate conversion from LLP to JSC IPO: regulatory issues Key Contacts GRATA Law Firm www.gratanet.com 2 Kazakhstan | Uzbekistan | Azerbaijan | Kyrgyzstan | Turkmenistan | Tajikistan | Mongolia |United Kingdom | USA Finance & Securities Our finance practice advises on international and domestic loans (including asset finance), project finance, acquisitions of banks and insurance companies, insurance matters, currency regulation and capital markets (including Eurobonds), as well as on corporate recovery matters. Our Products Equity Capital Markets Debt Capital Markets Project Finance Asset Finance and Real Estate Finance Islamic Finance Insolvency & Restructuring Derivatives and Structured Finance GRATA Law Firm www.gratanet.com 3 Kazakhstan | Uzbekistan | Azerbaijan | Kyrgyzstan | Turkmenistan | Tajikistan | Mongolia |United Kingdom | USA Our IPO experience Advising a major Kazakh telecommunication company on the proposed dual listing Advising JSC NWF Samruk-Kazyna on People’s IPO Advising a Kazakhstani company on the proposed London Stock Exchange AIM IPO Advice to a Russian company with assets in Kazakhstan on the proposed London Sock Exchange IPO Advice to a gold mining company on additional issuing of shares on the London Stock Exchange Advice on the proposed LSE IPO of a metallurgic company with substantial assets in the Republic of Kazakhstan Advice to ABN Amro Rothschild, Deutsche Bank, Credit Suisse and Morgan Stanley as underwriters in the IPO of Eurasian Natural Resources Company Advice to JP Morgan on the IPO of Arawak Energy Advice to Deutsche Bank and Credit Suisse on the IPO of JSC “Halyk bank” Advice to Numis as an underwriter in the IPO of Bateman Litwin GRATA Law Firm www.gratanet.com 4 Kazakhstan | Uzbekistan | Azerbaijan | Kyrgyzstan | Turkmenistan | Tajikistan | Mongolia |United Kingdom | USA IPO: possible options Through issuance of Global Depositary Receipts (GDRs) on the existing shares. In practice, most Kazakhstan companies list their securities on foreign stock exchanges through issuance of GDRs due to the absence of a clearing system and centralised depositary in Kazakhstan (for instance, JSC KazMunaiGas EP, JSC Kazkommertsbank, JSC Halyk Bank, JSC Alliance Bank, JSC BTA Bank IPOs). This option is available for joint stock companies only. In order to apply this option, it is necessary to convert the limited liability partnership to the joint stock company form (see next slide). Through issuance of new shares / GDRs on its shares by foreign controlling entity (for instance, Kazakhmys, Zhaikmunai, ENRC IPOs). This option is available for joint stock companies, as well as for limited liability partnerships. Through issuance of GDR on new shares / Direct listing of existing shares. These are legally possible options, but they were not tested in practice. Various local and foreign law issues might arise. GRATA Law Firm www.gratanet.com 5 Kazakhstan | Uzbekistan | Azerbaijan | Kyrgyzstan | Turkmenistan | Tajikistan | Mongolia |United Kingdom | USA IPO: corporate conversion from LLP to JSC Preparing the so called Transfer Act, the key document for the conversion; Consent of the Antimonopoly Agency; Increase of the charter capital; Notification of creditors / Settlement of debts; Establishment of a JSC; State registration of share prospectus; Cessation of LLP. GRATA Law Firm www.gratanet.com 6 Kazakhstan | Uzbekistan | Azerbaijan | Kyrgyzstan | Turkmenistan | Tajikistan | Mongolia |United Kingdom | USA IPO: regulatory issues Article 22-1 of the Securities Law is the major provision in any IPO A resident company is allowed to issue and place securities on the territory of a foreign state after obtaining authorized state body’s permission upon complying with the following: the company’s prior securities are included into KASE; in case of placement of shares and derivative securities (GDRs), the underlying assets of which are the shares of the company, (i) the shares should be included into the relevant category of KASE, and (ii) provided there is demand, at least 20% of the shares should be offered and sold on KASE. A resident company shall obtain a prior permission to list its securities on a foreign stock exchange. For the purposes of this article, a resident company is a company of which at least 2/3 of assets are located in Kazakhstan or issued in accordance with legislation of Kazakhstan and/or other legal entities with effective management in Kazakhstan. GRATA Law Firm www.gratanet.com 7 Kazakhstan | Uzbekistan | Azerbaijan | Kyrgyzstan | Turkmenistan | Tajikistan | Mongolia |United Kingdom | USA IPO: regulatory issues Permissions for options 1 and 2 It is not clear whether there is a need to obtain permission for issue / placement for options 1 and 2. At the time of writing this presentation, the new KASE has not been published. In case the permission is required, it will be necessary to carry out listing on KASE as 1st category and obtain permission for listing on a foreign stock exchange. Other permissions. Please note that depending on the nature of the activities/company itself other regulatory issues may arise (e.g. subsoil users should obtain a prior permission and waiver of state pre-emption right). GRATA Law Firm www.gratanet.com 8 Kazakhstan | Uzbekistan | Azerbaijan | Kyrgyzstan | Turkmenistan | Tajikistan | Mongolia |United Kingdom | USA Contacts Rashid Gaissin Managing Partner Tel.: +7 (727) 2 445 777 Mob.: +7 701 757-82-66 E-mail: [email protected] GRATA Law Firm www.gratanet.com Shaimerden Chikanayev Partner, Finance & Securities Tel.: +7 (727) 2 445 777 Mob.: +7 701 787-80-20 E-mail: [email protected] Marina Kahiani Senior Associate, Finance & Securities Tel.: +7 (727) 2 445 777 Mob.: +7 701 725-12-69 E-mail: [email protected] 9