TASHKENT/Feb. 28 2020 (The Bulletin) — — Uzbekistan said that it wanted to push through the most ambitious sell-off of state assets in Central Asia within the next five years.
Included in its list of assets for sale are a 10% stake in gold producer Navoi Mining and Metallurgical Plant, a 49% stake in Uzbekistan Airways and a 24% in the Uzbekneftegaz. It will also sell stakes in 1,000 businesses that are fully or part-owned by the government, including all of Uzbekistan’s vegetable oil producers and its alcohol distillers.
Perhaps the most eye-catching of these potential privatisations is the prospect of investors taking a 10% stake in the Navoi Mining and Metallurgical Plant. The Soviet-era plant is the single biggest industrial project in Uzbekistan, accounting for around 10% of Uzbekistan’s GDP. It also sucks up 18% of the government’s revenues and employs 54,000 people, according to Uzbek President Shavkat Mirziyoyev.
“By the volume of raw materials, the Navoi Mining and Metallurgical Plant is the third gold producer in the world. However, the value of its assets is much less than similar companies abroad,” the Uzbek government said in a statement.
“At present, the book value of NMMP is estimated at $1.3b, while the market price of comparable foreign enterprises is $11b.” And it is this perceived undervaluation that the Uzbek government wants to address with a privatisation programme.
The government’s statement said that it wanted to increase output at the plant to 94 tonnes by 2026 by implementing 40 projects worth $4b and the development of a new gold field at a cost of $525m.
Since Mr Mirziyoyev took over from Islam Karimov in 2016, he has pushed to open business to investors.
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— This story was first published in issue 438 of the Central Asia & South Caucasus Bulletin
— Copyright the Central Asia & South Caucasus Bulletin 2020