TASHKENT

Uzbekistan’s largest carmaker, the state-owned UzAuto Motors, has announced an official tender to select a consortium of underwriters to organise an initial public offering (IPO) of the company’s securities on domestic and foreign stock markets in 2022-2023.

The company, which plays a dominant role in the country’s car producing market, and, according to market participants, enjoys the government’s preferential treatment, exports cars to neighbouring countries, as well as to Russia and Azerbaijan.

UzAuto Motors founded in 1993 produces around 360,000 Chevrolet cars in an alliance with General Motors. Its main production plant is located in the eastern Andijan region, some models of cars are produced in the western Khorezm region.

The company said that it generated $2.6 billion in revenue through the production of 293,000 cars in 2020, of which $177 million worth of cars were exported.

In April 2021, the company placed its first corporate international bonds on the London Stock Exchange for a period of 5 years, amounting to $300 million to finance a new project to produce Chevrolet Onix and Tracker cars.

In October-November 2021, UzAuto Motors sent a feedback request to foreign investment banks such as JP Morgan, Citi, Credit Suisse, Raiffeisen Bank International, Societe Generale, Natixis and Gazprombank, as well as local commercial banks and brokers to identify potential investors and get an update on current market conditions and feedback from bank-underwriters organising IPO process.

The company together with the finance ministry developed tender documents based on the feedback provided by foreign and local investment banks and brokerage firms. The foreign banks and investment intermediaries are also allowed to participate along with local underwriters.

Earlier this year, Uzbekistan’s government has allowed foreign banks and investment intermediaries to carry out underwriting activities in Uzbekistan’s capital market without obtaining a separate license if they form a consortium with domestic legal entities (underwriters) that have a minimum base capital of not less than 500 million soums ($46,000).

The finance ministry has previously announced plans to organise IPOs and SPOs for 15 local companies on domestic and foreign stock markets in 2021-2022.