Auctions for sale of MTS Uzbek subsidiary fail due to lack of applications

ICT Materials 1 August 2013 14:43 (UTC +04:00)

Uzbekistan, Tashkent, August 1/ Trend, D. Azizov /

The auction of 14 regional branches of FE LLC Uzdunrobita, a subsidiary of JSC MTS in Uzbekistan, scheduled for July 31, failed due to a lack of applications, the real estate company in charge of tenders told Trend.

As it was reported, the total starting price of the assets, of 14 regional branches of Uzdunrobita LLC, was 471 billion soums.

The date of the future sales will be defined at the following meeting of Uzdunrobita's creditors, the real estate company said.

As it was reported, the Economic Court of the Karakalpakstan Republic and regional economic courts of Uzbekistan recognized the bankruptcy of Uzdunrobita's branches. The liquidation proceedings were initiated at all branches and liquidation managers were appointed.

Uzunrobita branches officially had a status of legal entity, but they were included under the head company.

In the summer of last year, the Uzbek Communication and Information Agency (UzACI) accused the company of allowing branches to work without separate licenses, and withdrew Uzunrobita's license.

Alongside with this, UzACI, being a shareholder of Uzdunrobita until 2002, was applying the company's branch structure and was actually supporting the possibility of using this structure when issuing licenses to the operator.

The Court supported the decision and as a result, the largest operator in the country suspended its client services. In April 2013, the Supreme Economic Court of Uzbekistan dismissed Uzunrobita's appeal to revoke the license.

From June 2013, monitoring was initiated by regulatory bodies with regard to LLC Uzunrobita, the largest mobile communication operator in Uzbekistan.

The total amount of claims against the company by Attorney General's Office, anti-monopoly bodies, Communication and Information Agency and tax bodies exceeded $1 billion which is equivalent to the amount of funds, invested by MTS for business development in Uzbekistan.

In September-November, 2012, when several employees of Uzdunrobita were given fines and correctional works on charge of extraction of uncontrollable profit, the company's assets were to be transferred to the state ownership.

In November, last year, the Appeal Board of the Tashkent City Criminal Court cancelled the decision of the Lower Court on transferring the company's property to state profit, defining the volume of financial claims against Uzunrobita at $600 million with payment of this amount in instalments over a period of eight months.

In late April the Tashkent Economic Court granted creditors' request, and made decision on recognition of Uzdunrobita's bankruptcy and opening liquidation proceedings.

In late May, the creditors' meeting made a decision about putting the company's property up for auction with a starting price of 600 billion soums.

As it was reported the auction was scheduled for July 1, and then for July 19, but didn't take place due to lack of applications.

In November last year, MTS filed a lawsuit against Uzbekistan in the International Centre for Settlement of Investment Disputes of the World Bank (ICSID). The lawsuit was registered on November 15, 2012 and accepted for proceedings.

The official exchange rate for August 1 is 2107.93 soms/$1.