State-owned Kazakh oil and gas producer National Company KazMunaiGas (NC KMG) moved to delist upstream unit KMG Exploration and Production (KMG EP) on January 22. Some 89.5% of votes at a KMG EP extraordinary meeting were in favour of a $14 per global depositary receipt (GDR) buyout valuing the unit at $5.6bn, almost a quarter more than its average market capitalisation in the month prior to the announcement of the buyout.

The move paves the way for a London listing of NC KMG, with Kazakhstan aiming to privatise the company within the next couple of years. The delisting is required because the enterprise cannot be listed on a major stock exchange along with its main upstream subsidiary. Two previous buyout attempts have failed due to price disagreements as well as problems in establishing trust between the company and its mainly international minority shareholders. Public battles between Astana-headquartered NC KMG and investors in KMG EP raised doubts over corporate governance and shareholder rights in Kazakhstan.

The buyback is set to give NC KMG over 75% of voting rights in the listed unit, which it will integrate. The company expects to delist KMG EP from the London and Almaty stock markets on May 11. The unit has been listed in London for 12 years.

Around 30% of oil and gas production in Kazakhstan is attributed to NC KMG. The company holds a 16.9% stake in the giant Kashagan oilfield in the Caspian Sea and a 20% stake in the neighbouring Tengiz field. Combined, they are seen as the world’s largest oil discovery of recent decades.

Kazakhstan’s ongoing $70bn privatisation drive is 71%-complete. The privatisation plan, which covers 904 companies, was originally set for a four-year stretch between 2016 and 2020. In 2016-2017, the country sold 367 companies and put up another 255 facilities for liquidation or reorganisation.

The government, which has contended with a plunge in oil revenues, has said it plans to sell stakes of at least 25% in 45 large state-owned companies. The transactions are to include at least seven IPOs, including the flotation of NC KMG.

By the end of this year, the authorities hope to complete the IPOs of Air Astana and the world’s second largest uranium miner Kazatomprom. The two IPOs are set to take place in the fourth quarter of 2018.

The authorities expect the privatisation programme to yield between $4bn and $7bn by the end of the drive, where the IPOs alone would account for $3.5bn-$5.5bn.