OREANDA-NEWS. January 28, 2009. Commercial banks of Uzbekistan are granted the right to use flexible methods of sale of the assets taken from debtor companies as a part of the bankruptcy procedure.

This right is granted in accordance with the Presidential Decree "On measures on further improvement of financial stability of the companies of the real sector of economy" of 28 November 2008 and the Presidential Decree "On approval of the Procedure of sale of economically unstable enterprises to commercial banks" of 19 November 2008.

This measure assists the flow of banking capital towards the financial recovery and restoration of production at economically insolvent companies through the exemption of bankrupt companies from the burden of debts and organisation of new companies on their basis, as well as provision of a wide range of tax benefits to them, and integration of new effective management methods.

In light of these, two meetings of the Republican Commission for the Sale of the Assets of Economically Unstable Companies to Commercial Banks were held. The meetings decided on the following:

- approval of the plan of actions of the Commission for the first half of 2009 and the plan of actions on the implementation of the tasks given in the Decree of the President of the Republic of Uzbekistan and the Order of the President of the Republic of Uzbekistan;

- approval of the working order of the Republican Commission;

- membership of the expert groups for the development of competitive offers on investments, necessary for the recovery of the activity of bankrupt companies;

- the list of bankrupt companies more than 70% of the assets of which consist of the bank debts and enterprises included in the preliminary list of bankrupt companies, waiting for the conclusion of the expert groups on whether they should be put up for auction sale and the specific terms of these auctions;

- a map schedule envisaging specific deadlines for the completion of specific measures;

- assignment of a specific member of the Republican Commission for each of the bankrupt companies to strictly control timely performance of the measures on the transfer of the bankrupt company assets to the balance of commercial banks and recovery of production processes;

- commercial banks accepting the transfer of the assets of bankrupt companies are tasked to develop and submit to the Commission business plans on the recovery, technical and technological modernization and re-equipment of productions, and if necessary, the implementation of full restructuring or re-profiling of the company and involvement of strategic partners and investors;

- involvement of modern, highly qualified managers in the management of restored productions, with the establishment of the mechanism of labour remuneration depending on specific results of production improvement at each individual company.

According to this regulation, measures are now being implemented on the recovery of production activity at about 80 companies that have been transferred to the balance of commercial banks or are about to be transferred as a result of the fact that 70% of credit liability of the company are bank loans.

The implementation of these government decisions are intended to assist fast liquidation of insolvent companies, and sharp reduction in the number of economically unstable and loss-making producers.