Air Astana Announces London IPO Plans to Boost Growth and Allow Stakeholders to Reduce Holdings

This decision represents a positive development for London's IPO market, which has experienced sluggish activity in recent years.

Kazakhstan’s prominent carrier, Air Astana, has officially announced its intentions to go public in London, with the aim of securing fresh capital to fuel its expansion while providing its current stakeholders, which include Kazakhstan’s sovereign wealth fund and British defense giant BAE Systems (BAES.L), the opportunity to reduce their holdings.

In a statement released on Friday, Air Astana confirmed that it is on track for an initial public offering (IPO) of both new shares and existing stock on the London Stock Exchange and Kazakhstan’s AIX market, scheduled for February.

This decision represents a positive development for London’s IPO market, which has experienced sluggish activity in recent years.

Air Astana is planning to offer a minimum of 25% of its total share capital to the public, with the company setting its sights on raising approximately $120 million from the IPO.

This move comes on the back of a successful year for the airline, which operated a fleet of 49 aircraft, served 7 million passengers, and reported an operating profit of $149 million in 2022.

BAE Systems, primarily known for its expertise in manufacturing fighter jets and submarines, initially invested less than $10 million in Air Astana back in 2001.

This investment came during a period when BAE was actively pursuing a radar system contract with Kazakhstan.

Depending on the extent of BAE’s stake sale, the upcoming IPO could yield substantial gains for the British defense conglomerate.

A BAE spokesperson expressed confidence in Air Astana’s robust management and its attractiveness to potential investors.

London’s stock market has faced challenges in recent years, largely attributed to the aftermath of Britain’s exit from the European Union.

Many companies have opted to list in the United States, where valuations are often perceived as more favorable. In 2023, only 23 issuers chose to go public in London, marking a 49% decline from the previous year, as reported by E&Y.

Air Astana’s decision to list in London signals its commitment to expansion and the diversification of its shareholder base.

The IPO is anticipated to not only inject vital capital into the airline but also rejuvenate London’s IPO landscape by offering investors an exciting opportunity to be part of Air Astana’s future growth story.