Indian company to sign peace agreement with subsidiary’s creditors in Uzbekistan

Business Materials 18 September 2012 15:35 (UTC +04:00)

Uzbekistan, Tashkent, Sept. 18 / Trend D. Azizov /

Indian Spentex Industries (Spentex) and creditors of the Spentex Toshkent Toytepa Company, a wholly owned subsidiary of Spentex in Uzbekistan, can sign a concord agreement until the end of the year, a source in government circles told Trend on Tuesday.

It was previously reported that the Economic Court of the Tashkent region declared Spentex Toshkent Toytepa, the largest textile company in Central Asia, as being bankrupt in May 2012.

According to the Uzbek side, the Indian company did not fully complete its obligations on payments for the acquired assets. The company failed to reach the planned production figures. These were the main causes of the bankruptcy. It was planned to put the property complex of the enterprise for sale in August.

Spentex announced its intention to file a lawsuit against Uzbekistan to the International Court of Arbitration in connection with the bankruptcy of the company.

According to the agency's interlocutor, at present British Grant Thornton International is assessing the assets of the textile enterprises.

In July 2006, Spentex Industries bought the textile company Tashkent Toytepa Textile worth $81 million from the Uzbek National Bank for Foreign Economic Activity. According to the purchase-sale agreement, the Indian company had to make payments on the amount of the transaction by late 2010.

Tashkent Toytepa Textiles was established in July 2005. Spentex Toshkent Toytepa includes two cotton mills in the Toytepa (Tashkent region) and Tashkent.