19 November 2021 1413

Announcement on the beginning of process on sale of shares of JSC “Elektrkishlokkurilish” 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 58,41 % shares in the chartered capital of JSC "Elektrkishlokkurilish" (hereinafter referred to as EKK 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:

The company was originally formed as a specialized trust for the electrification of agriculture in the Republic - "Uzselelektrostroy" in 1936. Trust "Uzselelektrostroy" No. 1 was reorganized into JSC "Elektrkishlokkurilish" (EKK) on July 7, 1998.

At the moment, EKK is the main contractor for the construction of power grid facilities with voltage from 0.4 kV to 500 kV in the Central Asia region and thus has great management and technical skills in this business throughout Uzbekistan.

The Company has more than 200 units of construction equipment and mechanisms used by six mechanized columns, ready to simultaneously carry out up to several large projects throughout the republic and abroad. The production base of EKK includes its own factories that fully meet its needs for metal and reinforced concrete structures (supports).

The business structure of EKK includes the following companies:

  • Namangan Steel Structures Plant (up to 4000 tons / year);
  • Kuvasay Reinforced Concrete Plant (up to 38.2 thousand m3 / year);
  • Department of production and technological equipment in Tashkent (production of concrete products 7.2 thousand m3 / year);
  • AU LLC "TAIZ - UNIVERSAL SERVIS" for the production of line couplings and hardware;
  • 6 mechanized columns.

There is significant potential for increasing the volume of work performed, including outside the Republic of Uzbekistan (Afghanistan, Turkmenistan, Tajikistan, Kyrgyzstan).

The company performed electrical work for such large manufacturing companies as: Lukoil, Eriell and Hundai Engineering, Hengyuan Group Co., Ltd

Sale Process

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

Bidders, who are interested in the acquisition of EKK 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 the following e-mail addresses: obidjan.azimbaev@uz.gt.com, nematulla.karimov@uz.gt.com and sh.saidniyozov@uz-assets.uz no later than 20:00 Tashkent time on 20 December 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, 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 (hereinafter - "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. Upon completion of the stage, Participants will be required to submit their binding offers ("Bids") written assurances of compliance with other requirements, if required by the Seller, as well as their comments on the draft Sale and Purchase Agreement, which can also be discussed at the negotiation stage.

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.

To participate in the Transaction, the Applicant must submit the following documents when submitting an EOI:

  • Application for participation (according to the attached sample Form-1),
  • A letter of guarantee on a stable financial position (see sample Form-2),
  • General information about the Applicant (see Form-3),
  • The plan for the development of the main profile of activities and further renewal of the Company's production facilities, improving the technical competence of employees and the competitiveness of the Company's business,

and also attach to the Application (Expression of Interest) documents confirming:

- 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.

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.

  1. make changes to the application deadline;
  2. 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;
  3. terminate the sales process for any reason; and/or
  4. terminate any discussions and negotiations with any potential buyer(s) with respect to the Transaction at any time and without giving a reason.
  5. for more information or clarifications about the process, please contact us by e-mail obidjan.azimbaev@uz.gt.com, nematulla.karimov@uz.gt.com and sh.saidniyozov@uz-assets.uz.
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