Uzbekistan is preparing to offer a portion of its largest state-owned companies on public markets. The national telecommunications operator, Uztelecom, is currently considered the most serious candidate for international listing. This program includes the telecommunications, aviation, banking, and energy sectors, aiming to attract more private and international capital and place large companies under the transparency and corporate governance requirements expected by stock market investors.
Access to Uzbekistan's Corporate Assets
For international investors, this process could open a pathway to access some of Uzbekistan's largest corporate assets. Uzbekistan is also conducting this initiative as a test to see how far the country's capital market reforms can go beyond the initial offering of UzNIF in London. This process is being facilitated through the Uzbekistan National Investment Fund (UzNIF); a fund managed by Franklin Templeton that holds shares in 13 major Uzbek companies.
Company Stock Offerings and Management Changes
Marius Den, CEO of Central Asia at Templeton Global Investments, announced that Uztelecom has made the most progress among the initial public offering candidates. The company's shares are currently accepted on the Tashkent Stock Exchange, and UzNIF is exploring the possibility of international listing and increasing the number of shares traded in the domestic market. An international offering could provide the opportunity for more investors to purchase shares in this company while also securing new capital for its future investment projects.
Den further stated that changes in corporate governance have been implemented across the entire portfolio. In total, 10 independent non-executive directors have been appointed to this portfolio, and in 11 out of 13 companies, supervisory boards now have a majority consisting of independent directors and representatives from Franklin Templeton. Additionally, 9 transformation programs have been completed, and it is expected that four more programs will be finalized in the coming months.
Initial public offerings can directly inject financial resources into the companies themselves, and the government will have priority if it decides to sell shares. This is an important distinction; selling existing shares merely changes ownership structure, while issuing new shares can provide the necessary financial resources for purchasing aircraft, developing telecommunications networks, electrical infrastructure, or other investment projects.
