Shareholders in BAE Systems set for windfall from Kazakhstan airline float

Investors in BAE Systems could be in line for a windfall of hundreds of millions of pounds in the stock market flotation of Kazakhstan’s national airline.

The defence giant is pondering whether to use the jackpot to pay shareholders a one-off dividend or use the money it will receive when Air Astana lists in London to fund even more share buybacks, The Mail on Sunday understands.

This would be on top of its a huge existing share buyback programme.

BAE has a 49 per cent stake in the Kazakh airline, which may be valued at as much as £780 million when it goes public. While BAE plans to keep a stake in Air Astana, it could still reap a huge windfall.

As the UK’s biggest defence contractor, BAE became an investor in 2001 when it was pursuing a deal to sell its radar systems to the Kazakh military.

Windfall: BAE has a 49 per cent stake in the Kazakh airline, which may be valued at as much as £780 million when it goes public

Though the deal fell through, BAE kept the stake, bought for £7 million. That proved astute – even if the holding is worth as little as the £63 million valuation BAE put on it last year.

The listing is expected next month and has buoyed the London Stock Exchange, which saw a dearth of flotations last year.

It will boost BAE’s coffers at a time when profits are already soaring and its order book is at record levels, partly as a result of the war in Ukraine.

BAE, which has more than 93,000 staff in 40 or so countries, has become a big submarine supplier and is also leading a consortium to develop the UK’s next generation of fighter jet, the Tempest.