UzAssets Investment Company under the State Assets Management Agency of the Republic of Uzbekistan announced an agreement on the sale of a 100% stake in UzAssets for US$100.0 million, in the authorized capital of Ferghana Oil Refinery to Sanoat Energetika Guruhi, the largest private oil and gas company in Uzbekistan.
The state share was sold on transparent and competitive terms through an open sale process involving a professional international consultant, State Assets Management Agency said.
The international consulting company KPMG Valuation and Consulting LLC was selected as a privatization consultant through a competitive selection process and the valuation was carried out by a Big 4 professional valuation company. The international law firm Dentons provided additional legal support.
The announcement of the start of the sale process was published on the official websites of the State Assets Management Agency and UzAssets on 30 April 2021. In addition, the consultant has carried out a wide range of work on investor sounding (notification/notification of investors) through a regional network of offices in the world.
An investment teaser (a short presentation about the Enterprise) was sent to more than 30 different foreign and local investors in the oil and gas industry, of which the public sale process continued with the participation of three investors.
Access to the virtual data room (VDR), which contains the results of a comprehensive due diligence analysis (financial, tax, legal and environmental), is provided to each applicant. In addition, there is an opportunity to visit the plant, receive answers from the consultant on privatization and the management of the Enterprise.
Taking into account the recommendations of the privatization consultant, based on the study of the proposals received, the most suitable proposal was selected that meets all the established qualification criteria, with price parameters exceeding the results of an independent assessment.
The enterprise was one of the largest oil refineries in the country with an initial production capacity of 6.5 million tons, the history of which dates back to 1959, including the Alty-Aryk fuel production, which was commissioned in 1907. In the 60s of the last century, the FNPZ was provided with raw materials from the fields of Western Siberia, and was also part of the former all-Soviet raw materials processing system. Over the past 20 years, the plant has not carried out work on modernization and reconstruction.
One of the main difficulties for the full functioning of the plant is the lack of raw materials on the territory of Uzbekistan. Covid-19 also had a negative impact on the Company’s financial performance, exacerbating the shortage of crude oil supplies and reducing demand for petroleum products. Over the past 10 years, on average, about 1-1.5 million tons of crude oil have been processed per year, so in 2020 only 900 thousand tons of raw materials were processed.
