Creditors to reconsider asset price of Indian company’s Uzbek subsidiary

Creditors to reconsider asset price of Indian company’s Uzbek subsidiary

Uzbekistan, Tashkent, July 2 / Trend, D. Azizov /

The issue of selling Spentex Toshkent Toytepa's assets (a wholly owned subsidiary of Indian Spentex Industries) must be reconsidered by the creditors.

According to the source, no application was filed. A repeated auction was on July 2.
The sale's issues will be reviewed by creditors, who can lower the starting price of the assets in case of no auction results.

The decision to put up Spentex Toshkent Toytepa's assets and to hold the auction was made by a meeting of creditors on May 28, 2013.

The initial starting price of the company's property is 142.92 billion soums.

As reported, in July 2006, Spentex Industries purchased the textile company "Tashkent Toytepa Textile" LLC from the Uzbek National Bank for Foreign Economic Activity for $81 million. According to the purchase-sale contract, the Indian company had to make payments on the amount of the transaction by late 2010.

In March 2010, the government of the republic approved a scheme for restructuring the remaining payments for the property complex of the company. According to it, Spentex Industries had to make additional investments of $ 27.8 million in the textile company in exchange for installments in specified period of remaining payments to the amount of $44.8 million for the acquired asset in 2010-2016.

According to the terms of restructuring, the Indian company has committed to ensure the production of not less than 34,600 tons of cotton yarn, 8.3 million meters of finished fabrics, as well as exports of manufactured products worth at least $ 78 million per year since 2010.
According to Uzbek estimates, the Indian company was unable to make payments on acquired assets in time, and could not bring Spentex Toshkent Toytepa to the planned production indices. As a result, the agreement with the investor was canceled and bankruptcy proceedings were initiated.

The Tashkent Economic Court declared Spentex Toshkent Toytepa bankrupt in May 2012.
The Spentex Toshkent Toytepa includes two cotton mills, one in Toitepa (Tashkent region) and another in Tashkent.

"Tashkent Toytepa textiles" LLC was established in July 2005 by the national bank and "Uzinterimpeks" State Joint Stock Foreign Trade Company on the basis of the Uzbek-Korean Kabool-Uzbek joint venture, which in its turn was also declared bankrupt and sold to repay the debt to the amount of $ 50 million. The initial cost of the Kabool-Uzbek joint venture's assets was $222 million.

The official exchange rate is 2.096.19 soums/$1 on July 2.

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