17 July 2021

Announcement on the sale of 51,01 % of shares in the chartered capital of JSC “Shakhrisabz vino-aroq”

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 51,01% of the shares in the chartered capital of “Shakhrisabz vino-aroq” JSC (hereinafter – the Company or Shakhrisabz vino-aroq) through an competitive sale process (hereinafter – the Deal or Transaction).

Following the selection of the best proposals from international consulting companies, KPMG was selected as the UzAssets’ Privatization Consultant (hereinafter Consultant) for the Deal.

Brief information about the Company:

  • Shakhrisabz wine vodka was founded in 1932 and is one of the largest enterprises for the production and wholesale of vodka and wine products in Uzbekistan. The factory is located in the historic town of Shakhrisabz, Kashkadarya region.
  • The total area of the enterprise is 7.281 hectares, of which 5.88 hectares are occupied by the production area. Besides, the plant has four wine processing facilities.
  • Shakhrisabz wine vodka is one of the most attractive factories, with 193.7 hectares of its own vineyard. There is still 50.0 hectares of land in the Yakkabog district, on the basis of which it is also planned to expand the vineyard, which gives the Company the opportunity to provide its own raw materials for its activities.
  • The total volume of vodka production in 2020 amounted to 402 thousand dal, 91% of which falls on the production of vodka “Shakhrisabz”. The company produced 80 thousand decaliters of wine. The brands "Port Wine Kesh" and "Shakhrisabz afsonasi" are especially popular.
  • In 2020, the Company's revenue amounted to more than 52.0 billion soums, profit before taxes 7.57 billion soums.
  • The number of employees is 320 people, of which 259 are qualified production personnel.

Additional information about the Company and can be obtained at the link: http://www.vino-aroq.uz   

Sale Process

The sale is organized as a competitive bidding process open to all interested parties (hereinafter referred to as Participants). In accordance with the adopted approach, the mechanism and process of selling the Company will consist of the following stages:

  1. Expression of interest by sending an application in the form of a letter (hereinafter referred to as the EOI) and qualifying selection of participants;
  2. Review of commercial and financial proposals and completion of the Deal.

At the first stage, Participants will be asked to submit an expression of interest in the form of a letter in English, Russian or Uzbek languages (at the applicant's discretion, while the letter in Russian or Uzbek must be accompanied by a letter in English) along with documents on compliance with the qualification requirements, including the availability of sufficient financial and managerial resources to carry out the Transaction, provided in Appendix 1. Supporting documents may be submitted no later than the deadline for submitting the binding offer. The EOI must be sent to the following email addresses: a.mukhamatkulov@uz-assets.uz, dkalazhanov@kpmg.kz, annakireeva@kpmg.ru, ssandykbayeva@kpmg.kz no later than 18:00 Tashkent time on August 18, 2021.

The bidding process is open to all interested Participants.

UzAssets will take all necessary measures for a transparent, professional and successful organization of the process of selling its shares in the Company together with the involved Consultant.

Based on the results of studying the submitted EOIs, the Seller, no later than August 21, 2021, will compile a “Short-List” of participants admitted to the second stage - review of commercial and financial offers, who will be personally notified of the selection process results.

Participants in the second stage will be asked to sign a non-disclosure agreement (hereinafter referred to as NDA) no later than August 25, 2021. After signing the NDA participants in the second stage will receive further instructions regarding the Sale process and information materials about the Company in the form of an Information Memorandum containing a description of the Company's operating activities, as well as financial information and forecasts of the financial performance of the Company. In addition, participants will have the opportunity to conduct further due diligence (due diligence) of the Company, including access to a virtual data room (VDR) containing detailed financial, legal, tax and other Company information, as well as the results of pre-sales due diligence prepared by the Consultant. Participants will also be given the right to visit the Company's facilities. In addition, the participants in the second stage will be provided with the Draft Sale and Purchase Agreement (hereinafter referred to as the SPA) for making amendments and comments to it to be submitted together with the binding offer (BO).

After reviewing the information about the Company, the participants in the second stage will be asked to submit the binding offer for completion of the deal no later than September 20, 2021. The participant who has proposed the best combination of the price offer, and the agreed terms of the sale and purchase agreement during the negotiations will be declared the winner. The seller will invite the winner to conclude the transaction in accordance with the rules of the Republican Stock Exchange “Toshkent” and the legislation of the Republic of Uzbekistan.

Appendix 1. Qualification requirements for participants in the process (for both legal entities and individuals)

These requirements are intended to determine the winner (along with other conditions, which include a quote and other commercial terms).

  • Confirmation of the buyer's intentions to retain the main activities of the Company (production of wine and liquor products) and the buyer's ability to ensure the operation of the plant, including compliance with industrial safety, labor and environmental protection requirements;
  • Present the Company's development plan (business concept);
  • Founders and beneficiaries, as well as officials of the buyer must:
  • confirm the absence of active criminal proceedings and investigations against them;
  • not be on the international lists of false entrepreneurs and bankrupts, as well as in similar lists of the Republic of Uzbekistan.
  • Compliance with the Law of the Republic of Uzbekistan No. 660-II (as amended on January 15, 2019) "On countering the legalization of proceeds from criminal activity, financing of terrorism and financing the proliferation of weapons of mass destruction";
  • The ability and willingness to fulfill social conditions to the staff of the Shakhrisabz vino-aroq wine factory that are not worse than those described in the staff collective agreement;
  • Ability and willingness to maintain the staffing of the Company for 12 months at a level not less than the staffing of the Company as of the date of closing the Deal;
  • Compliance with the requirements of Law No 370 of the Republic of Uzbekistan (as amended on 4 May 2014) “On Joint Stock Companies and Protection of Shareholder Rights” to propose an offer to the holders of the remaining shares to buy their shares at market value.

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 KPMG with respect to the sale of the Company, which could be inferred from the publication of this announcement. UzAssets and KPMG 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 KPMG 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)   inform the minimum selling price of the Company;

(vi) for more information or clarifications about the process, please
contact us by e-mail a.mukhamatkulov@uz-assets.uz, dkalazhanov@kpmg.kz, SSandykbayeva@kpmg.kz 
и annakireeva@kpmg.ru

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