Under the current privatization programs, the State Assets Management Agency of the Republic of Uzbekistan (the UzSAMA) reports it reached an agreement on sale of 99.02% state-owned shares (the Transaction) in equity capital of Ferganaazot JSC (the Company) with the international company Indorama Corporation Pte. Ltd (Investor).
Deloitte (Advisor) works as leading financial advisor of the Transaction, the International Finance Corporation (IFC) supports as strategic advisor, while KPMG conducts inpedendent valuation of the Company.
Throughout the duration of the project, the privatization process was regularly covered on the official website and social networks of the UzSAMA.
As part of the privatization process, which started in December 2021, the Advisor conducted extensive market sounding, distributing investment teasers to potential international investors throughout wide network of Deloitte and IFC. The market sounding also included publications in the international business media, including a special edition of the Financial Times dated June 27, 2022.
As a result of the market sounding, 10 Express of Interests were received. All the received applications were further reviewed for compliance with the announced qualification criteria, including absence in the international sanctions lists. Based on qualification results 4 applicants were recognized as fully compliant with the qualification criteria and accepted for the next stage of the process.
Onwards, the qualified applicants were given the opportunity to conduct their own due diligence of the Company, to review analytical reports on financial, tax, legal and environmental issues, prepared by the Advisor, to meet with the management of the Company and prepare their Binding Offers.
As a result of Binding Offer process, the best offer was submitted by Indorama Corporation Pte. Ltd (Singapore). The submitted purchase price amounts 140 million USD ($130 million USD plus 107 billion UZS) besides Investor’s investment obligations of 100 million USD for modernization of the Company. The submitted purchase price terms fairly correspond to indicative value range initially assessed by the Advisor and independent valuation.
Based on the analysis conducted with the involvement of Deloitte and IFC, there is every reason to believe that in the current situation of uncertainty in the global economy, turbulence in commodity markets and high risks of global recession, the submitted terms of the Transaction are fairly reasonable and meet the interests of the economy of Uzbekistan. The UzSAMA also expects that Indorama Corporation Pte. Ltd. as one of the largest international producers of mineral fertilizers is capable to conduct deep modernization of the Company, which production assets depreciation level currently exceeds 80%.
The terms of the Transaction also include the Investor’s obligation to retain all ongoing social programs of the Company, keep headcount and wages, arrange qualification training for the Company’s employees, as well as the develop a modern environmental monitoring program.
The parties signed Term sheet of the Transaction on sale of 99.02% state block of shares in equity capital of Ferganaazot JSC on January 16 2023, at Uzbekistan-Singapore Business Forum organized on the eve of the state visit of the President of the Republic of Uzbekistan to Singapore.
The results of the privatization process were approved by the relevant decision of the State Commission for conducting tenders for the sale of state property.
Full closure of the Transaction will include essential amendments to current legislative acts, including guarantees of natural gas supply and free trade conditions for domestic market.
The UzSAMA expresses its honest gratitude to all applicants which participated in the privatization process, as well as to Deloitte and IFC for their advisory support.
About Indorama Corporation
Indorama Corporation is an international industrial conglomerate with more than 160 manufacturing facilities in 38 countries. Indorama is one of the world's leading manufacturers of fertilizers, polymers, industrial chemicals, fibres, textiles, agricultural and medical gloves with over 45,000 employees. The company has been actively investing in Uzbekistan since 2010, and is developing projects in textiles, agriculture and fertilizer production with more than 3,000 local employees.
