Astana, 29 October. Freedom Holding Corp. has signed an investment agreement with Kokzhiyek Fund LP, part of the Baiterek national holding group: the fund will buy the company's bonds worth up to $1.16 billion, Freedom Holding said in a filing with the US Securities and Exchange Commission (SEC).
The bonds will be issued by FRHC-IF.SPC Ltd., Freedom Holding's subsidiary in the Astana International Financial Centre, and listed on the AIX exchange. They have a five-year term and pay 7.8% a year, semi-annually. The money will go to seven projects: an artificial intelligence supercluster, data centres, telecommunications, media, urban technology and cross-border trade infrastructure. Freedom and its subsidiaries must contribute at least 20% of the project costs themselves; the deal provides for a guarantee from the chief executive and financial covenants.
The deal amounts to about 14% of Freedom Holding's market capitalisation, estimated at $11.2 billion.
What it means: A state development institution is becoming a major lender to a private financial group – and for its infrastructure and technology projects rather than its banking business.
Who benefits: Freedom Holding – long-term dollar money for five years at 7.8%. Baiterek – coupon income and a stake in artificial intelligence and data centre projects that the government calls a priority.
Background: Freedom Holding was founded by Timur Turlov; the company trades on Nasdaq under the ticker FRHC and is headquartered in Almaty. Baiterek is the national managing holding through which the state supports business, housing and exports; in October it signed a $1 billion memorandum on a terminal at the port of Kuryk.
