Tire plant built with a foreign debt of $156 million sold for 2 times cheaper

On January 20, 2023, Uzkimyosanoat JSC signed an agreement to sell 100% of the “First Rubber Technology Plant” LLC (Angren tire plant) to Tatneft of Russia for 826.57 billion soums.

At first, the amount of the transaction was indicated as 826 million soums on the corporate information portal. In the afternoon of January 26, this information was deleted from the portal, and another information was posted stating that the value of the transaction was 826 billion soums.

826,573,075,200 soums is 73 million 245 thousand 288 dollars according to the CB exchange rate on January 20. It should be noted that the plant was built in 2017 with a loan of 156.4 million dollars received from Eximbank of China.

The authorized capital of the company is 658 billion soums. Also, the value of its net assets was 2.3 trillion soums in the last quarter before the transaction.

On December 2, 2022, within the framework of the Uzbek-Russian business forum held in Samarkand, Uzkimyosanoat and Tatneft signed an agreement on the sale and purchase of 100% of the shares of “First Rubber Technology Plant” LLC. The price of the deal was not disclosed then.

About the “First Rubber Technology Plant”

The construction of the “First Rubber Technology Plant” began in 2017. In July 2018, the production process started at the factory.

The plant is located on an area of 30 hectares, and the main purpose of its construction was the production of tires for passenger cars in the first stage, and the production of tires for conveyor belts and agricultural machinery in the second stage. The local initiator of this project is Uzkimyosanoat JSC.

In August 2019, the former deputy PM, former governor of Tashkent region Gulomjon Ibragimov was appointed as the plant’s director general.

In general, the factory was built with foreign loans, and then supported during the pandemic with foreign loans. To make it easier for the local manufacturer, a duty was introduced on the import of tires. But in 2021, it became clear that the company was working inefficiently.

At that time, Alisher Kadirov, the vice-speaker of the Legislative Chamber, said that the Angren tire factory, which was built with the help of foreign debt of $156.4 million, was working at only 15% capacity. “100,000 tires are stocked in the warehouse, the reason is as always – they do not meet the quality requirements,” he said based on the information of the Chamber of Accounts.

It is not known whether the concessions granted to the plant will be canceled after privatization.

About Tatneft

Tatneft is a Tatarstan (Russian) oil company engaged in the production and service of equipment for oil and gas production, oil refining, petrochemical, gas station network, composite cluster, electric power industry, oil and gas industry.

Its main assets are located in the territory of the Russian Federation, it implements business projects in domestic and foreign markets.