Financial report of Kazakhmys Holding Limited for 2023 revealed key details of a major deal to sell a stake in Kazphosphate LLP, which began in 2021 and was completed in the summer of 2023.
According to Forbes.kz, the sale of 40% of shares in Kazphosphate LLP to KP Fertilizers Ltd was reported in October last year — the company is registered in the Astana International Financial Centre (AIFC) and is controlled by Russian investors. It was also revealed at the time that Kazakhmys had received an advance payment of $140 million.
According to the report, in 2021 the Kazakhmys group acquired Kazphosphate from Galimzhan Yessenov (No. 19 in the Forbes Kazakhstan ranking) and Aizhan Yessim (No. 49 in the Forbes Kazakhstan ranking), paying $611.2 million.
At the same time, 97% of the amount ($592.9 million) was borrowed by Kazakhmys from Halyk Bank. The group also recognised goodwill of $137.1 million. The new owner at that time was Kaz Chemicals LLP, of which 80% was owned by Kazakhmys and 20% by the brothers Nurkhan and Nurzhan Nurlanov (sons of former Majilis Speaker Nurlan Nigmatulin).
For reference: goodwill is the excess of the cost of acquiring an organisation as a whole property complex over the market value of all its assets and liabilities.
Notably, the report of the parent company of Kazphosphate, registered in the UK, shows the transaction amount as $612.87 million — $1.67 million higher than stated in Kazakhstan.
In September 2022, CAF Holding Ltd was established, into which 80% of Kazphosphate shares were transferred, leaving 20% with Kaz Chemicals. Of these, 16% was still controlled by Kazakhmys, and 4% by the Nurlanov brothers.
In 2023, after the partial sale to KP Fertilizers, Kazakhmys restructured the Kazphosphate group:
- spun off the Novodzhambul Phosphorus Plant into a separate subsidiary — NDPP LLP;
- kept the Mineral Fertiliser Plant (MFP) within Kazphosphate;
- split the goodwill from the purchase of Kazphosphate (40% to 60% respectively).
Kaz Chemicals then sold the remaining 2%, transferring the debt to Halyk Bank of $314 million to the buyer, and also receiving a second tranche of $140 million. At the end of 2023, 50% of the stake in Kazphosphate LLP was owned by KP Fertilizers Ltd, 40% by Kazakhmys Resources B.V., and 5% each by the Nurlanov brothers. It is noted that all four own Kazphosphate through CAF Holding Ltd.
Financial result for Kazakhmys:
- disposal of net assets — $502.8 million;
- debt transfer — $314 million;
- proceeds from the sale — $280 million;
- write-off of MFP goodwill — $81.4 million;
- total profit from the transaction amounted to $67.3 million.
It has become known that changes occurred in KP Fertilizers Ltd: in February 2024, Dmitry Strezhnev, who had previously been under UK sanctions, left the founding members. In 2021, Forbes estimated his wealth at $750 million.