BAE mulls one-off dividend on Air Astana’s London float

Shareholders in BAE systems could be set for a windfall of hundreds of millions of pounds after Kazakhstan’s Air Astana lists in London.

Shareholders in BAE systems could be set for a windfall of hundreds of millions of pounds on the back of Khazakhstan’s national airline listing on the London stock market.

According to a report in The Mail on Sunday, the arms giant is mooting whether to use the extra money to reward shareholders with a one-off dividend or fund further share buyback programmes.

BAE, which is the UK’s biggest defence contractor, has a 49 per cent stake in Air Astana.

It invested around £7.9m into the airline in 2001 to help fund its launch, while at the same time pursuing a deal to sell radar systems to the Kazakhstan military.

News of the listing comes as a major boost for London’s sluggish IPO market. The Kazakhstan carrier is the biggest airline in Central Asia with over 50 aircraft in its fleet and hopes to raise £95m with dual listings in the UK capital and its home country.

Its valuation could reach up to £780m following the float, which is expected next month and would be a windfall for BAE depending on how much of its stake it sells.

BAE Systems declined to directly comment on the report, but a spokesperson said: “Air Astana is a thriving, well-managed business and we believe it presents an attractive proposition to the market.”

“We’re supporting the group’s plans to launch an initial public offering, as part of the investment strategy to accelerate its next growth phase and support the airline’s continued long-term success.”

An uptick in government defence spending as a result of war in Ukraine and the Middle East has seen BAE Systems net bumper profits. The company hike its dividend by 11 per cent in August as its order backlog reached a record £66.2bn.

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