31 August 2021

Announcement on the beginning of process on sale of shares of JSC “Kafolat Insurance Company” is owned by UzAssets JSC

In accordance with the Presidential Decree PD-6167 of the Republic of Uzbekistan, dated 11 February 2021, “On measures to further accelerate privatization processes of state assets”, “UzAssets Investment Company” JSC under the State Assets Management Agency of the Republic of Uzbekistan (hereinafter – UzAssets or Seller) announces its intention to sell 69,55% shares in the chartered capital of JSC "Kafolat Insurance Company" (hereinafter referred to as Kafolat or the Company) through a competitive sale process (hereinafter – Transaction). Grant Thornton (hereinafter – Consultant), an international company, acts as UzAssets' consultant on the Transaction.

 Brief information about the Company:

Kafolat provides services in 17 classes of insurance services comprising over 120 specific products under the license issued by the Ministry of Finance of the Republic of Uzbekistan since 1997. Kafolat is one of the top-10 insurance companies in Uzbekistan in terms of capital and has a 6 percent share in total insurance premiums for 2020.

Over 600 employees and 3,400 insurance agents provide services to clients across the country through 15 branches, 60 divisions and 156 insurance centers, including reinsurance and life insurance services.

International rating agency Fitch Ratings has confirmed the Company's financial strength rating at 'BB-' in 2020, which demonstrates its consistently high solvency, and reliable business reputation in the insurance market. Given its competitive position and the diversification of its product portfolio, Fitch assesses its prospects as "beneficial". The information and rating agency SAIPRO has assigned a rating of "UZ A++" on a national scale, which characterizes the Company's excellent financial reliability.

The company has cooperation agreements on reinsurance with such foreign reinsurance companies as: "Abu Dhabi National Insurance Company", "Oman Insurance Company", "Insurance House", "Polish REDirect Insurance", "London Market Plc", SAO "VSK" (Russia), JSC "Oil Insurance Company" (Kazakhstan), "Barents Reinsurance SAAce Insurance Pvt. Ltd". The company is the only Associate Member of the International Underwriting Association of London in Uzbekistan.

For more information about the company and is available at: https://www.kafolat.uz

Sale Process

The sale is organized on a competitive basis, open to all interested parties (hereinafter referred to as the "Participants"). The process will consist of two stages.

Bidders, who are interested in the acquisition of Kafolat will be invited to submit their bids, including an Expression of Interest ("EOI") and information, required in the annex to this Announcement. Applications must be submitted to obidjan.azimbaev@uz.gt.comnematulla.karimov@uz.gt.com and j.usmonov@uz-assets.uz no later than 18:00 Tashkent time on 30 September 2021.

The Consultant shall compare the completeness of the information submitted by the Bidders for compliance with the requirements set out in the Announcement. The Consultant and the Seller, at their discretion, may request additional information, of a clarifying nature, in the EOI application or its annexes.

On the basis of the EOI received, the Seller shall, by 5 October, determine the list of Bidders eligible to proceed to the next stage of the Transaction based on the Consultant's recommendation (Short-List). Bidders, admitted to the next stage of the sale process, will be notified personally of the results of the selection. Until the date of approval of this list, the Seller reserves the right to accept and consider any such EOI, at its sole discretion.

Participants admitted to the next stage of the Transaction will be asked to sign a Non-Disclosure Agreement ("NDA") within 3 working days of being sent to the investor's e-mail address specified in their application.

Participants admitted to this stage and who have signed the NDA will be given access to a virtual data room (hereinafter "VDR"), the opportunity to visit the Company, and to ask questions of the Company's management. Participants will be required to submit their binding offers ("Bids") as well as written assurances of compliance with other requirements, if required by the Seller, within 20 days of signing the NDA.

After receiving binding offers, the Seller shall decide within two weeks to enter into further individual negotiations with one or more Bidders, together with the Consultant, to discuss specific aspects of their offers for the purpose of maximizing the value of the Transaction. There shall be no time limit to the negotiations.

The participant who has proposed the best combination of the price offer, and the agreed terms of the SPA during the negotiations will be declared the winner. The Seller will invite the winner to conclude the Transaction in accordance with the legislation of the Republic of Uzbekistan on securities.

Appendix to the Announcement.

     In order to participate in the Transaction, the Bidder shall provide information, with supporting documents attached to the Application (Expression of Interest):

     - on the ability to finance the Transaction, as well as the operations, through own and/or borrowed funds;

     - absence of criminal proceedings and investigations in relation to the founders and beneficiaries, as well as the name of the Buyer's officers in international lists of liars and bankrupts, as well as in similar lists of the Republic of Uzbekistan

     - compliance with the requirements of the Law of the Republic of Uzbekistan "On Combating Money Laundering, Financing of Terrorism and Financing Weapons of Mass Destruction Proliferation

     - the Buyer's willingness and ability to improve the Company's IT infrastructure

 Additional Terms and Conditions

            UzAssets reserves the right to change the sequence of the sale process or to refuse to sell to or negotiate with any potential buyer(s) at any time without explanation.

            This announcement, or any part of its contents, should not be construed as a form of commitment on the part of UzAssets, the Company, and Grant Thornton with respect to the sale of the Company, which could be inferred from the publication of this announcement. UzAssets and Grant Thornton reserve the right, in their sole discretion, at any time and in any respect, without assuming joint or several liabilities.

(i)        make changes to the application deadline;

(ii)       follow different procedures with respect to various interested parties, and/or negotiate with one or more potential purchasers within the schedule and procedure provided jointly by UzAssets, the Company, and Grant Thornton to the exclusion of any other potential purchaser(s) without prior notice;

(iii)      terminate the sales process for any reason; and/or

(iv.)      terminate any discussions and negotiations with any potential buyer(s) with respect to the Transaction at any time and without giving a reason.

 (v.)     for more information or clarifications about the process, please contact us by e-mail obidjan.azimbaev@uz.gt.comnematulla.karimov@uz.gt.com and j.usmonov@uz-assets.uz

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