JUNE 8 2016 (The Conway Bulletin) — ALWA, a German plastics manufacturer, bought a 15% stake in Orient Finance Bank, an Uzbekistan-based lender, for 9.3b sum ($3.2m), news agency Trend reported. The bank was able to sell the stake by increasing its capitalisation. This is in line with the government policy of selling off stakes in state-owned or state-participated assets.
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(News report from Issue No. 284, published on June 10 2016)
JUNE 7 2016 (The Conway Bulletin) — A new Hyatt hotel will open in mid- June in Uzbekistan’s capital, Tashkent, sources told local media. The US-based company had planned to open the new hotel in 2013. The original plan was a $113m investment and completion by early 2015. According to reports, costs have now grown to around $205 and include an investment from the government. The hotel will open just days before a meeting of the Shanghai Cooperation Organisation in Tashkent.
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(News report from Issue No. 284, published on June 10 2016)
JUNE 9 2016 (The Conway Bulletin) — An Uzbek court in Samarkand jailed six locals who had planned to join the radical group ISIS in Syria and had incited others to practice Sharia law. The court handed out sentences of six to nine years. All the accused, five men and one woman, pleaded guilty. Official reports say that dozens of Central Asians travel to Syria every month to ISIS.
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(News report from Issue No. 284, published on June 10 2016)
JUNE 10 2016 (The Conway Bulletin) — A wave of mergers, acquisitions and privatisations has hit Central Asia and the South Caucasus.
At The Bulletin, we’ve extensively covered the Kazkommertsbank buyout over the past two years. But elsewhere, from Azerbaijan to Uzbekistan, the banking sector is in a restructuring phase.
A renovation of the financial sector had become crucial after an extended economic downturn hit the money markets, from currency exchange rates to loan sustainability. What’s more, low oil prices, besides depressing budget capacity and economic growth, have hindered investment and project financing.
From small local lenders to country-wide behemoths, banks across Central Asia and the South Caucasus have equally suffered, albeit for different reasons.
And since the beginning of 2016, small quakes have shaken the sector.
In Azerbaijan, immediately after the sharp depreciation of the manat, middle and small-sized banks were unable to maintain the newly set capital ratio requirements, triggering failures and mergers.
This week a rather obscure deal involving an Uzbek bank and a German plastics manufacturer marked the beginning of the new privatisation era in Uzbekistan.
And of course, across the border in Tajikistan, we are now three weeks into the care-taking administration of the country’s second-largest bank.
This is both a stress test and an opportunity. 25-year-old countries cannot afford to have a banking crisis every decade. Dependent as they are on commodity prices and regional trade, they need to seize this occasion to build more reliable and stable foundations for their finance sector.
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(News report from Issue No. 284, published on June 10 2016)
JUNE 6 2016 (The Conway Bulletin) — Investigations into corruption allegations at its subsidiaries in Central Asia has slowed a sale by Swedish telecoms operator Telia Company, formerly TeliaSonera, of its 59% stake in Netherlands-based holding company Fintur to Istanbul-based Turkcell, sources involved in the sale told Bloomberg News. Fintur is valued at $1b and owns telecoms subsidiaries in Kazakhstan, Azerbaijan, Georgia, Tajikistan, and Moldova.
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(News report from Issue No. 284, published on June 10 2016)
MAY 30 2016 (The Conway Bulletin) — Car manufacturer GM Uzbekistan will produce a new model of Chevrolet Aveo cars for both the domestic market and exports to Russia, state-owned Uzavtoprom said. GM Uzbekistan, 75% owned by Uzavtoprom and 25% owned by US- based GM, said production of the new model will cost around $100m and its Uzbek plant will manufacture 73,600 cars/year. GM Uzbekistan is an important part of the Uzbek economy as it is one of its biggest JVs outside oil and gas.
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(News report from Issue No. 283, published on June 3 2016)
MAY 27 2016 (The Conway Bulletin) — Uzbek authorities have removed dozens of satellite dishes from homes on Prospekt Kosmonavtov, a main road in Tashkent which runs down to the official residence of Uzbek President Islam Karimov. The website El Tuz, based outside Uzbekistan, said the action was connected to a face-lift for the capital city ahead of the upcoming summit of the Shanghai Cooperation Organisation.
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(News report from Issue No. 283, published on June 3 2016)
MAY 22 2016 (The Conway Bulletin) — The Ustyurt Gas Chemical Complex in Uzbekistan, bigger than any other petrochemical complex in Europe and Asia, officially started operating, marking a coming-of-age for the Uzbek-Korean joint venture that has built and will operate the plant.
The plant cost around $4b and took five years to build. Ustyurt will process around 4.5b cubic metres of gas per year. Uz-Kor Gas Chemical, a joint venture between state-owned
Uzbekneftegaz and South Korea’s largest petrochemical company Lotte Chemical, said that it has already received gas for processing.
At a ceremony to celebrate the event, Lotte Chemical, a subsidiary of South Korea’s Lotte Group, said this was a first step in their campaign to expand westwards.
“The completion of the complex will significantly help Lotte Chemical expand its business territories to Russia and North Africa as well Europe and Central Asia,” Lotte said in a statement.
Uzbek and South Korean PMs Shavkat Mirziyoyev and Hwang Kyoahn also attended the ceremony.
Uzbekistan is among the top 15 gas producing countries and considers the Ustyurt gas complex to be vital to its economic plans. It is also planning parallel investments to increase gas production at its ageing fields in Karakalpakstan, west Uzbekistan, where the Ustyurt complex is located.
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(News report from Issue No. 282, published on May 27 2016)
MAY 25 2016 (The Conway Bulletin) — The World Bank sent a $20m loan to Uzbekistan to fund the update of the cadastre system, through which the government registers properties. Outdated registers and complicated bureaucratic procedures, as well as rampant corruption and a lack of legal protection for companies, have kept Uzbekistan among the worst countries to do business in.
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(News report from Issue No. 282, published on May 27 2016)
MAY 24 2016 (The Conway Bulletin) — Life.ru, a Russian newspaper, said that GM Uzbekistan might soon stop selling its cars to Russia, as the company’s distributor in Voronezh is on the brink of bankruptcy. GM Uzbekistan, a joint venture between US-based GM and state owned UzAvtosanoat, faced problems last month, when a corruption case hit its top managers and slowed car exports to Russia. It is one of the most important industrial units in Uzbekistan outside the oil and gas sector.
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(News report from Issue No. 282, published on May 27 2016)