Uzbekistan Airways Accelerates IPO Preparation Plans

Tashkent, Uzbekistan (UzDaily.com) — President of Uzbekistan Shavkat Mirziyoyev has reviewed a presentation on accelerating the transformation of Uzbekistan Airways and preparing the joint-stock company for a share offering on the international capital market.

The work is being carried out as part of reforms of large state-owned enterprises and preparations of companies within the National Investment Fund portfolio for initial public offerings. The fund currently includes 13 major companies, for which the task has been set to accelerate transformation processes and introduce international standards of corporate governance and reporting.

It was noted that the National Investment Fund, managed by Franklin Templeton, placed assets on the international market last month for the first time in the amount of US$690 million. Demand for the placement exceeded supply fourfold, with total investor applications reaching nearly US$3 billion.

Companies planned for IPO preparation this year include Uzbekistan Airways, Uzsanoatqurilishbank, Uzbekhydroenergo, Uzbek National Electric Networks and Uzbektelecom.

Representatives of Franklin Templeton conducted an assessment of the national carrier and developed a transformation program comprising 115 measures. According to estimates presented, full implementation would increase the company’s operating profit by US$120 million per year.

Additional revenue is expected from optimization of the route network, increasing the share of direct sales, improving customer services, reducing delays and cancellations, improving efficiency of service companies including catering and maintenance, as well as faster response to market changes and recruitment of qualified specialists.

The program is projected to increase the airline’s market value from US$1.6 billion to US$2.3 billion. However, the presentation noted that implementation progress remains insufficient.

The president stressed that preparation for the international capital market requires significant improvement in management quality, strengthening financial discipline, reporting under international standards and improving credit ratings.

By the end of this year, Uzbekistan plans to place 15–20% of Uzbekistan Airways shares through an international IPO. Measures are planned to ensure objective assessment of the company, improve its investment attractiveness, remove specialized aircraft from the balance sheet and introduce a compensation mechanism for services provided under state orders.

The presentation also reviewed the development prospects of the aviation sector amid growing tourism flows. Since the beginning of the year, the number of foreign tourists visiting Uzbekistan has increased by 27.5% to nearly 5.5 million. The strongest growth was recorded from China, Malaysia, Japan and the United States.

It was also noted that the airline is not yet fully adapting to rising demand due to delays in expanding its fleet. The president therefore instructed the introduction of a separate procurement procedure, faster decision-making on aircraft acquisition and the use of international experience in this area.

Shavkat Mirziyoyev also said there are all necessary conditions to turn Tashkent into the largest aviation hub in Central Asia. To achieve this goal, coordination between Uzbekistan Airways, Uzbekistan Airports and the New Tashkent airport will be ensured under a unified management system, synchronizing infrastructure development, route networks and transit potential.

Following the presentation, officials were instructed to establish a dedicated project office to coordinate the transformation of companies within the National Investment Fund, attract internationally experienced specialists to management bodies and prepare and implement clear IPO roadmaps for each company.