23 april 2018

Central Asia news

Uzbekistan is selling objects of the national chemical industry

01.11.2006 12:05 msk

Mikhail Fadeyev, RBK Daily

Business Uzbekistan

Uzbekistan has decided to sell state interest in practically all enterprises of the national chemical complex. Experts believe that investors may take interest because there are few free assets in the Commonwealth nowadays. The Uzbek authorities are also waiting for Russian companies but the latter bide their time and do not evince interest for the time being.

In early July, the government of Uzbekistan announced a comprehensive program of privatization charted for 2006-2008. The list of enterprises and objects to be sold to the highest bidder was compiled and endorsed in September. The list includes chemical companies, engineering works, metal producers, oil and gas companies. The authorities intend to sell 40-49% in each of them and even controlling interests in some enterprises.

Enterprises of the chemical industry are particularly interesting to potential investors. The authorities will sell the interest in nine factories (Navoiazot, Ammofos, Jizakplastmassa, Elektrkimyosanoat, Uzkimesanoatloijiha, Ferghanaazot, Ferghana Furane Factory, Ferghana Man-Made Fiber, and Samarkand Chemicals) once united under the state-controlled Uzkimyosanoat. The Uzbek Bureau of Individual Privatization is waiting for applications for Ammofos (49%), Elektokhimprom (49%), and Navoiazot (49%). Insiders claim that some of the applicants are Russian companies but wouldn't identify them.

According to Uzbek officials, Russian investors are more than welcome. Uzbekistan may even consider selling them the rest of the stock afterwards.

Finam Investment Company is the financial consultant of the government of Uzbekistan. Sergei Kharchenko of Finam told RBK Daily that Russian companies find the Uzbek chemical market interesting because of its location (it allows for export to the Russian and Kazakh markets on the one hand and to the Middle East on the other.) According to Kharchenko, foreign companies like Gruppo Radici and Ecotechnic Chemicel have already invested in the Uzbek chemical industry. Availability of deposits like the Tyubegatan field is another major attraction.

Experts agree that Uzbek assets may actually attract Russian investors. Georgy Ivanin of Antanta Capital believes that Russian investors may aspire for access to cheap gas and therefore for relatively cheap production of nitrogen fertilizers. The analyst is convinced that Evrokhim, Renova Orgsintez, and Constructive Bureau should find the opportunity particularly alluring. The mentioned companies in the meantime decline comment on the possibility of participation in Uzbek privatization.

Uzbek gold: waiting for the buyer

Liquidation Commission of the bankrupt Uzbek-American Zarafshan-Newmont will organize the auction by the end of the year. Manager Alexander Lolak claims that assets of the joint venture are being evaluated now and that the date and the terms of the auction will be decided on in early November. A meeting of creditors is expected to make the decision concerning foreign companies' participation in the auction. Approached by tax structures demanding $49 million worth of unpaid taxes from Zarafshan-Newmont, the Navoi Regional Court proclaimed the joint venture a bankrupt in early October.