KEGOC repaid one of loans from EBRD

Altynay IbraimovaJanuary 11, 2017

Yesterday KEGOC reported on the early repayment of the loan to the EBRD in the amount of $ 151.9 mn. This loan was drawn in May 2011 by KEGOC for the realization of the investment project "Reconstruction of 220 kV CCPR -Osakarovka". 

Recall that the first tranche of the partial early repayment was held in December 2016. At the end of 2016 the amount of liabilities of this loan amounted to $ 27.4 mn. KEGOC fully repaid the loan on 5 January. We assume that the loan repayment was carried out at the expense of own funds of the Company. At the end of 9M2016 cash of KEGOC amounted T41,2 bn, or $ 122.7 mn. (at the rate of 335.84 tenge / $).

Our view                                            

We view the news as neutral. At the same time, we maintain our recommendation "HOLD" for the KEGC KZ shares because KEGOC's total amount of loans is still high ($337.78 mn). Despite the ample supply of liquidity for the timely repayment of debt, we believe that the leverage implies high risk for share price.