The state will be able to retain special rights in strategic companies after they are privatized
The new decree on privatization provides for the possibility of retaining the state's special right to participate in strategic enterprises even after they are sold to a private investor. A similar mechanism — the "golden share" institution — was abolished in 2022.
The state will be able to retain special rights in strategic companies even after their privatization
When enterprises of strategic importance are privatized in Uzbekistan, the state may retain a special right to participate in their activities. This mechanism is provided for in the president's decree of August 28 on reducing state participation in the economy and accelerating privatization.
According to the document, the special right may be introduced in order to protect national security, ensure economic stability, and protect public interests.
A potential buyer must be notified that the state retains such a right before the start of the enterprise's privatization process.
At the same time, after the completion of privatization, the state's special right to participate is introduced by a separate decision of the president. Its subsequent cancellation can also be carried out only on the basis of a separate decision of the head of state.
The decree does not specify exactly what powers this special right grants, nor does it provide a separate list of enterprises for which this mechanism is intended to be applied during privatization.
In 2022, the institution of the "golden share" — the state's special right to participate in the management of privatized strategic companies — was abolished in Uzbekistan.
Previously, through this mechanism, a state representative could join the supervisory board and veto certain important decisions.
At that time, the State Assets Management Agency stated that the "golden share" had not actually been used for nearly ten years, and that it could reduce investors' interest in privatization and restrict the rights of other shareholders. The European Bank for Reconstruction and Development had also recommended abandoning this mechanism.
The list of strategic enterprises previously included companies in the production and service sectors, as well as the banking sector, including the Navoi Mining and Metallurgical Combinat, Almalyk MMC, "Uzmetkombinat", "Uzbekneftegaz", "Uzbekugol", "Hududgaztaminot", UzAuto Motors, "Uzkimyosanoat", "Navoiyazot", "Uzbekhydroenergo", "Thermal Power Plants", "Uztransgaz", and UzGasTrade.
The document is part of a new package of measures aimed at reducing the state's share in the economy.
Under the program, state shares in 84 business entities, 1,242 real estate properties, as well as nearly 8,000 hectares of land plots for entrepreneurial and urban planning purposes are planned to be put up for sale. The president had previously mentioned such plans during an open dialogue with entrepreneurs in August.
In addition, the liquidation and reorganization of 85 enterprises with state participation is envisaged. Another 84 previously unsold properties are to be re-auctioned with a starting price of 1 million soums.
The total value of the assets intended for sale is estimated at approximately 100 trillion soums. By the end of the year, the authorities aim to generate at least 14 trillion soums in revenue from their realization.