The Decree of the President of the Republic of Uzbekistan “On measures to accelerate the reform of enterprises with state share and the privatisation of state assets” was adopted on October 27, 2020. The Decree provides for the approval of:
1) a list of large state-owned enterprises and business associations subject to transformation;
2) a list of enterprises with state share, where corporate governance and financial audit are being introduced, operational efficiency is increased;
3) a list of state assets put up for public auction through targeted programs for pre-privatisation preparation and increasing investment attractiveness;
4) a list of enterprises where bundle of the state shares (stakes) will be fully sold to private sector through public auctions;
5) a list of state owned real estate will be sold to private sector.
According to the Decree, 62 entities made it to the list of companies that will undergo pre-privatisation preparation.
For the sale of state property, the State Tender Commission was instructed:
- To form working groups by November 15, 2020;
- To attract consulting organisations for privatisation and increasing investment attractiveness, and develop road maps for the implementation of these works by February 1, 2021;
- To develop targeted programs for pre-privatisation preparation and increasing the investment attractiveness of enterprises by July 1, 2021.
The State Commission for Holding Tenders for sale of State property was instructed to ensure that Agency for management of State assets will put up a bundle of shares (stakes) in enterprises and real estate for public auction starting from November 1, 2020.
Also, the State Commission was authorised to re-asses the starting price of the state package in the event of their failure to sell within three months at a public auction.
Important to note that state bundle of shares (stakes) in enterprises enlisted in Annex No. 4 to the Decree are put up for auction in a single lot; with a value not exceeding 100 million sum, put up for public auction, if they are not sold within three months, are put up for trades as follows: shares – at the starting price of “1 sum”, bundle of shares – on the basis of the principle “1 share – one lot for 1 sum”.
At the same time, the practice of selling state-owned enterprise at a “zero” redemption value is cancelled and they are put up for public auction at a starting price of “1 sum” with accepting investment and social obligations based on the decisions of the Jokargy Kenes of the Republic of Karakalpakstan and government bodies of in the regions, the Chairman of the Council of Ministers of the Republic of Karakalpakstan and the administration of the regions, as well as the State Commission for holding tenders for the sale of state property, accepted by them within their powers.
It is also mentioned that buyers of state assets can make payment in instalments in mode set by law.
When paying by instalments, buyers who have partially made payments according to schedule of contracts for the sale and purchase of a state share with an instalment plan, before full pay out is made, a certificate of ownership is issued “without the right to dispose” with the right to participate in the management of the company and receive dividends in proportion to the paid part of the purchased shares;
buyers who have partially made payments under contracts of sale and purchase of state real estate are issued a state order for the right of ownership “without the right of disposal” until full payment under the contract.
If you are interested in acquiring state assets, Winfields law firm is ready to provide legal support in privatisation procedures in accordance with the requirements of the legislation of the Republic of Uzbekistan.