Through banks investments production activities have been restored on 156 bankrupt enterprises
Tashkent hosted a press conference on "The program of anti-crisis measures. The role of commercial banks to improve the health of bankrupt enterprises" organized by the Central Bank of the Republic of Uzbekistan.
During the event, it was noted that the global financial and economic crisis that began five years ago, caused serious damage to the economies of several countries and to the activities of large multinational companies and financial institutions. Its effects have led to an increase in the number of unemployed and lowering of population incomes. At the same time, program of anti-crisis measures developed by the leadership of Uzbekistan, has a not only mitigated the impact of the global financial crisis, but also ensured the consistent development of the national economy and improved its stability.
Under this program, domestic commercial banks pay special attention to the timely adoption of the necessary measures for the financial support of the real sector of the economy, especially to financing of projects aimed at enhancing the processes of modernization, technical and technological re-equipment, provided the sharp decline in production costs, rationalization of technological processes, reducing the use of raw materials, electricity, energy and others in production of processes. Banks also generate loans for businesses and investment projects, including those on a preferential basis.
Thus, significant investment and loans from commercial banks have been directed at improving the financial stability of the real sector of the economy, improving the mechanisms of financial recovery and management of insolvent enterprises, modernization, technical and technological re-equipment of production processes.
It should be noted that the experience of involvement of commercial banks in the processes of financial rehabilitation of insolvent companies has fully justified itself. Increased use of financial and organizational capacities of commercial banks in the rehabilitation of insolvent companies is an innovative approach that has no analogues in the world. Under this scheme, commercial banks acquire the property of bankrupt manufacturing companies at auction and through bidding. Thus they take investment commitments for financial recovery and restoration of bankrupt enterprises, their technical and technological modernization and upgrading, manufacture of competitive products for domestic and foreign markets. Afterwards banks sell these companies to strategic investors at a market value.
The mechanism of the rehabilitation of insolvent companies envisages, along with the manufacture of new products, the introduction of modern management methods and creation of new jobs. The latter fulfills an important social and economic problem.
As of September 1, 2013 commercial banks have received 171 bankrupt enterprises on their balance. These are mainly enterprises that have amounts payable of 70 percent or more, consisting of outstanding bank loans with estimated cost of at least $ 2 million and the capacity of creating more than 100 new jobs. These companies also need to be considered important by the government and are able to manufacture competitive products in domestic and international markets.
For their modernization, technical and technological re-equipment, banks have invested around 442.6 billion soums.
Through bank investments 156 companies restored manufacturing activity, over 25 thousand jobs were created. Until today, 122 of these enterprises have been sold to strategic investors.
It should be noted that, much of the credit belongs to the managing companies and individual business units established under large commercial banks to effectively manage the assets of the transformed enterprises. For example, these management companies are the NBU Investment, NBU Invest Group, Asaka Investments, Agroinvest Recovery and PSB Industrial Investments. These companies have gained considerable experience in organization of production and management, market research, effective use of pawned property, project investment and servicing of investment loans, business plan development, job creation and manufacture of new competitive products.
It should also be noted that for the success of the recovered companies the Government tax and customs preferences are of great importance. The enterprises created by banks, including with participation of other investors, are exempt from paying income tax, single tax, property tax and land tax for three years till it is sold to a strategic investor.
At present, 49 enterprises are on the balance of commercial banks, 34 of them have established high-tech production lines and are put on sale for new investors. On the remaining 15, production lines are being restored and construction and installation work are being carried out.
Commercial banks of Uzbekistan will continue to actively participate in the structural reform of the national economy, modernization, technological renewal of production, financial support of insolvent and low-profit enterprises.