24 June 2021 2635

Additional information on Announcement of the sale of 100% of the shares of the chartered capital of “Fergana Oil Refinery” LLC

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 Joint-Stock Company” (hereinafter – UzAssets or Seller) announces its intention to sell 100% of the shares in the chartered capital of “Fergana Oil Refinery” LLC (hereinafter – the Company or Fergana Oil Refinery).

On April 30, 2021, the UzAssets published an Announcement about the sale process of the Company and invited all interested parties to participate.

Taking into account the recommendation of the Privatization Consultant, KPMG, on global best practices for similar transactions and the Company’s development priorities, a two-step process for the sale of the Fergana Oil Refinery (hereinafter referred to as the Transaction or Sale) is announced.

According to the approach adopted, the process of selling the Fergana Oil Refinery consists of the following steps:

1. Based on the Expression of Interest, entering into a Non-Disclosure Agreement

2. Collection of binding offers, negotiation and closing of the Transaction.

At the first stage, on the basis of the Expressions of Interest received (EOI), the Seller will be asked to sign a non-disclosure agreement (hereinafter referred to as NDA) by 3 July 2021, for admission to Stage 2 of the Transaction. At the same time, the Seller will accept and consider expressions of interest received until 6:00 p.m. on July 3, 2021, Tashkent time.

At the second stage, following the signing of the NDA, potential investors will receive access to additional information, simultaneously for all, on 6 July 2021.

Potential investors will be asked to review additional information and confirm their willingness to complete the Transaction by submitting a binding offer (BO) and providing comments to the draft sale and purchase agreement (SPA) no later than August 30, 2021.

Prospective investors will be required to provide information necessary and sufficient to qualify under the qualification requirements in accordance with Appendix 1, along with their binding proposals.

On the basis of the binding bids and amendments to the SPA received, the Seller will, within three weeks’ time, approve the list of companies admitted to possible negotiations. The winner will be determined on the basis of, among other things, the best combination of the price offer and the agreed terms of the SPA.

 

Appendix 1. Requirements for Qualifications for Participants in the Process.

         These requirements are intended to determine the winner (along with other conditions including the financial offer and the terms of the Project of the purchase agreement).

  • Demonstration of professional experience of the buyer and/or its founders and/or beneficiaries and/or affiliated groups of the buyer's companies in the production and sale of petroleum products;
  • Sufficient financial resources to acquire a 100% share in the authorized capital by financial means or equivalents;
  • Opportunity and commitment to invest in FNPZ “Fergana Oil Refinery” LLC as part of the modernization program of the plant to achieve long-term growth of the business and economy of the Republic of Uzbekistan as outlined in the information on implementation of the Development Program of LLC "Fergana Oil Refinery" in 2020-2030, with which potential buyers can get acquainted after signing a confidentiality agreement, in particular, to ensure the following conditions:
  • Launch of production of modern and environmentally friendly gasoline and diesel fuel complying with Euro-5 requirements;
  • Production of base and motor oils of groups II and III according to API, as well as Jet A-1 aviation fuel;
  • Production of liquefied natural gas from hydrocarbon gases increased;
  • Increasing the processing depth of oil refining to 92%;
  • Modernization of the oil block and setting up production of motor oils that meet international standards;
  • Ensuring an increase in production capacity to at least 2 million tons by 2030.
  • Opportunity and commitment of the seller to ensure the employment of the plant personnel according to the average headcount within 1 year from the date of closing; optimization of the average headcount by no more than 20% per year starting from the second year with compensation payments;
  • Compliance with the Law of the Republic of Uzbekistan No. 660-II (as amended on January 15, 2019) "On Counteraction of Legalization of Proceeds of Crime, Financing of Terrorism and Financing Weapons of Mass Destruction Proliferation";

 

Disclaimer

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 KPMG with respect to the sale of the Company, which could be inferred from the publication of this announcement. UzAssets and KPMG (acting as the exclusive financial advisor to the Company in the Transaction) reserve the right, in their sole discretion, at any time and in any respect, without assuming joint or several liabilities

(i)      make changes to the application deadline;

(ii)     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 KPMG to the exclusion of any other potential purchaser(s) without prior notice;

(iii)    terminate the sales process for any reason; and/or

(iv)    terminate any discussions and negotiations with any potential buyer(s) with respect to the Transaction at any time and without giving a reason.

(v) for additional information or clarification about the process, please email a.mukhamatkulov@uz-assets.uz, dkalazhanov@kpmg.kz, SSandykbayeva@kpmg.kz  and lgavrilova@kpmg.ru

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