Nostrum Oil & Gas Agrees $304.6 Million Kazakhstan Sale Ahead of Wind-Down

What has Nostrum Oil & Gas announced?

Nostrum Oil & Gas PLC has agreed to sell its Kazakhstan operations for $304.6 million, subject to adjustments and a lengthy list of completion conditions.

The buyer is Altaris Holding Ltd, which is owned by Fincraft Energy Holding Limited and Alturion Holding Limited.

The transaction covers the seller's interests in Zhaikmunai LLP and POSITIV Invest LLP, alongside rights under certain related loan agreements. Zhaikmunai operates the Chinarevskoye field, while POSITIV holds interests in the Stepnoy Leopard fields.

If the deal completes, Nostrum expects to repay its senior secured notes in full, make a partial repayment to senior unsecured noteholders and then begin an orderly wind-down of the group.

For ordinary shareholders, that final point is crucial. Nostrum does not currently expect any residual proceeds available for distribution to shareholders to be material, if there are any at all.

The full details can be read in the original company announcement.

The key figures

Item	Detail
Agreed purchase price	$304.6 million
Escrow amount	$10 million
Target initial repayment to unsecured noteholders	Around $150 million
Note maturity date	30 June 2026
Initial long-stop date	15 September 2026
Possible automatic extension	Two months
Ad hoc unsecured noteholder group support	More than 50% of the SUNs represented

The purchase price remains subject to adjustments for the target companies' net working capital, net debt and cash positions when the transaction completes.

Nostrum also said most of the group's unrestricted cash balance sits outside the sale. It expects no material liabilities to remain between Zhaikmunai and POSITIV and the rest of the group following completion.

Why is Nostrum selling the business?

The immediate issue is debt repayment.

Nostrum's senior secured notes and senior unsecured notes matured on 30 June 2026. The group was unable to repay the amounts due at that time.

The board therefore considers the proposed sale and subsequent wind-down to be the best available outcome for the group and its stakeholders.

This is not a transaction intended to fund a fresh growth strategy or a new acquisition programme. It is a creditor-led outcome designed to convert the operating assets into cash, settle liabilities as far as possible and wind down the remaining corporate structure.

That makes the distribution order important. Secured creditors sit ahead of unsecured creditors, while ordinary shareholders are last in line.

What will noteholders receive?

Nostrum expects the senior secured notes, or SSNs, to be repaid in full on or around completion. The associated guarantees and security over the relevant companies would then be capable of falling away without a separate SSN holder vote.

The position for senior unsecured noteholders, or SUN holders, is less straightforward.

The group is targeting an initial repayment of around $150 million, although it provides no assurance that this figure will be achieved. It believes further, materially smaller repayments could follow over time.

Those later recoveries would depend on several moving parts, including:

• Final working capital and net cash adjustments
• Potential claims under the sale agreement
• Wind-down expenses
• Contingent assets and liabilities
• The group's remaining principal obligations

Nostrum plans to launch a consent solicitation, which is a formal process for asking bondholders to approve changes to their existing terms. Among other matters, SUN holders will be asked to release guarantees and security connected with the sold businesses and approve a mechanism for completing a solvent wind-down.

An ad hoc group representing more than 50% of the SUNs has expressed support for the proposals. That is encouraging, but it does not guarantee formal approval from eligible holders.

What could ordinary shareholders receive?

Nostrum's wording is unusually direct: the group does not currently expect residual proceeds available for ordinary shareholders to be material, if any.

A final distribution has not been ruled out completely. However, it would only be determined at the end of the wind-down and would depend on final proceeds, creditor recoveries, retained liabilities, transaction costs and other contingencies.

In practical terms, the $304.6 million headline price should not be viewed as cash attributable to shareholders. Creditors, costs, adjustments and potential claims must be dealt with first.

This distinction matters because a large disposal price can look attractive in isolation. Here, the sale proceeds are primarily being used to address debt that Nostrum could not repay at maturity.

For context on the company's financial position before this proposed exit, see my coverage of Nostrum's FY 2025 results.

The deal still faces meaningful conditions

The sale is not complete and there is no certainty that it will complete.

Conditions include Kazakhstan merger control clearance, consents and waivers from the country's Ministry of Energy and Qazaq Gaz, shareholder and pre-emption processes relating to POSITIV, SUN holder approvals and confirmed financing for the buyer.

The initial long-stop date is 15 September 2026. This is the deadline by which the conditions must be satisfied or waived. It can be automatically extended once by two months.

One notable detail is that the transaction does not require Nostrum shareholder approval. That limits ordinary shareholders' direct influence over whether the sale proceeds.

Nostrum has also agreed to place $10 million of the consideration into escrow for at least six months. Escrow means the money is held by a third party and can potentially cover valid claims connected with the sale agreement.

The positives and negatives for investors

Potential positives

• The $304.6 million agreement provides a route to repay the secured notes in full.
• A group representing more than 50% of unsecured notes has expressed support.
• Most unrestricted group cash is expected to remain outside the transaction.
• The sale offers a structured route forward after Nostrum failed to repay its notes at maturity.

Key negatives and uncertainties

• Completion depends on regulatory, commercial, financing and creditor conditions.
• Unsecured creditors are only expected to receive partial repayment.
• The purchase price can change through completion adjustments.
• $10 million will initially be retained in escrow against potential claims.
• Wind-down costs and contingent liabilities remain uncertain.
• Nostrum does not expect any ordinary shareholder distribution to be material, if one is made at all.

What investors should watch next

The next important development should be the formal SUN consent solicitation and its proposed terms. Investors should also watch for confirmation that the buyer has secured financing and that the required Kazakhstan approvals have been obtained.

Completion by the long-stop date, or confirmation that the two-month extension has been triggered, will be another key milestone.

Above all, shareholders should focus on recoverable value after debt, costs and liabilities rather than the headline sale price. This announcement provides a potential route to an orderly resolution, but it also makes clear that creditors are the principal financial beneficiaries and that shareholder recovery remains highly uncertain.