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BMB Munai, Inc. Agrees To Sell Its Operating Subsidiary, Emir Oil LLP

Stocks in this article: KAZ

ALMATY, Kazakhstan, Feb. 14, 2011 /PRNewswire/ -- BMB Munai, Inc. (NYSE Amex: KAZ) (the "Company") today announced that it has entered into a definitive purchase agreement to sell all of its interest in its wholly-owned operating subsidiary, Emir Oil LLP, to a subsidiary of MIE Holdings Corporation (HKEx: 1555).  The initial purchase price is $170 million, which is subject to various closing adjustments and the deposit of $36 million in escrow to be held for a period of twelve months following the closing for indemnification purposes. In connection with the purchase, all notes and sums owed by Emir Oil LLP to the Company will be transferred to the purchaser.  Upon consummation of the sale, the Company will use a portion of the proceeds to repay the Company's outstanding $60 million convertible senior notes.

The Company intends to make an initial cash distribution to stockholders in the estimated range of $1.04 to $1.10 per share upon the closing from the transaction proceeds, after giving effect to the estimated closing adjustments and escrow amount and the repayment of the convertible senior notes and after providing for the payment of or reserve for other anticipated liabilities and transaction costs.  The mid-point of the estimated initial distribution price range ($1.07) represents a premium of 19% over the prior 30-day average trading price of the Company's common stock.  The Company intends to make a second distribution to stockholders that could range up to approximately $0.30 per share following termination of the escrow, subject to the availability of funds to be released from the escrow, actual costs incurred and other factors.

The definitive purchase agreement was approved by the five independent directors of the Company, based upon the recommendation of an independent oversight committee of the board.  UBS Investment Bank advised the independent oversight committee in the transaction.

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