RESOLUTION OF THE PRESIDENT OF THE REPUBLIC OF UZBEKISTAN

of April 21, 2006 No. PP-330

About measures for financial improvement of the companies of the textile industry and enhancement of the mechanism of realization of cotton fiber by it

In recent years thanks to the state support given to development of the textile industry in the country the modern textile companies making high-quality, competitive products therefore production volumes and export of the textile products meeting international standards steadily grow in industry are created.

At the same time, rates of upgrade, modernization and involvement of foreign investors in the textile industry are insufficient that leads to the fact that else considerable amounts of the most valuable cotton fiber are processed at the companies equipped with the obsolete equipment into low-quality products. In industry the number of unprofitable and economically insolvent companies is not reduced. High is debt of the companies of the textile industry to suppliers of cotton fiber, and also on the credits of commercial banks.

For the purpose of acceleration of upgrade and modernization of the companies of industry, resolute liquidation technically backward and economically insolvent companies, creating favorable conditions for activities of the modern textile companies and attraction in process of modernization of foreign investors:

1. Take into consideration that:

as a result of the carried-out inventory count the textile companies are revealed, according to appendix No. 1, the production of high-quality competitive textile products and not having perspectives of further development working at obsolete processing equipment, not providing on the majority of which at the initiative of Goskomdemonopolization, the State Tax Committee of the Republic of Uzbekistan, Uzpakhtasanoat association and other creditors proceedings on bankruptcy are in accordance with the established procedure initiated and liquidating procedures are carried out;

concerning economically insolvent textile companies, according to appendix No. 2, of the banks created together with foreign investors and having overdue debts on the credits, creditors initiate insolvency proceedings or penalties in the procedure established by the legislation are imposed on their property.

2. Establish procedure according to which:

realization of cotton fiber to the companies specified in appendix No. 1, for its conversion on obsolete processing equipment before carrying out at the companies of upgrade and modernization on the basis of modern processing equipment is not allowed;

for the companies specified in appendix No. 3, performing now upgrade and modernization, till July 1, 2007 the procedure for realization of cotton fiber operating for them remains;

the processing enterprises of the republic having overdue debt for earlier acquired cotton fiber are not admitted to exchange trading.

3. Create Government commission on selection of investors and trustees investment assets for the companies of the textile industry (further - the Commission) in structure according to  appendix No. 4.

Determine the main objectives and powers of the Commission:

determination of sales terms and transfer to management, carrying out open competitive selections among the investors or trustees investment assets having experience of management by the modern textile companies on economically insolvent textile companies on which property requirements of creditors for overdue debts in the budget, on the bank loans issued under guarantee of the Republic of Uzbekistan and also before JSC Uzpakhtasanoat for cotton fiber are imposed;

inclusion in the Program of upgrade and modernization of the textile companies having obsolete processing equipment, and exception of it;

decision making about inclusion in the list of the textile companies admitted to the closed biddings on realization of cotton fiber at the Uzbek republican commodity and raw exchange, and exception of the specified list;

decision making about renewal of the admission of the textile companies to acquisition of cotton fiber at the Uzbek republican commodity and raw exchange after their upgrade and modernization.

Assign functions of working body of the Commission to SAC Uzbekengilsanoat.

4. Commissions (Azimov R. S.):

according to the given authority to provide the operational solution of the tasks assigned to it and to report quarterly in the Office of the President of the Republic of Uzbekistan on specific results of the carried-out work;

till July 1, 2006 to complete work on selection of investors or managing companies for the companies specified in appendix No. 2.

5. SAC Uzbekengilsanoat together with the Ministry of Economics, the Ministry of Foreign Economic Relations, Investments and Trades, the Ministry of Finance of the Republic of Uzbekistan in three-months time to develop and introduce in the Cabinet of Ministers the Program of upgrade and modernization of the companies of the textile industry for 2006-2008.

6. Grant the right SAC Uzbekengilsanoat to accept in structure of the company of the companies with foreign investments in the form of associated members, according to decisions of meetings of their founders.

7. Ceased to be valid

8. To the Ministry of Finance together with the State Tax Committee of the Republic of Uzbekistan in two weeks to develop and approve in accordance with the established procedure Regulations on calculation and the tax discharge on value added in case of realization of cotton fiber to the companies of the republic through UZRTSB.

9. Confidentially.

10. It is excluded

11. To the Ministry of Justice of the Republic of Uzbekistan together with the interested ministries and departments to make in the Cabinet of Ministers offers on the changes and amendments in the legislation following from this resolution in a month.

12. To impose control over the implementation of this resolution on the Prime Minister of the Republic of Uzbekistan Sh. Mirziyoyev.

Appendix № 1

to the Resolution of the President of the Republic of Uzbekistan of April 21, 2006 No. PP-330

The list of the companies with obsolete processing equipment on which proceedings on bankruptcy in the procedure established by the legislation are initiated

Companies SAC Uzbekengilsanoat

1. JSC Toshtukimachi (Tashkent)

2. JSC Fergana Textile Plant (Fergana) *

3. Fabateks LLC (Tashkent)

4. JSC Ulugbek (Fergana region) *

5. JSC Buvayda (Fergana region)

6. Kotton Export LLC (Fergana region)

7. Dolinateks LLC (Fergana region)

8. Mirteks LLC (Fergana)

9. JSC Balikchi (Andijan region)

10. JSC Shakhrikhon (Andijan region)

11. JSC Namangantekstil (Namangan) *

12. JSC A. Gizhduvany (Bukhara region) **

13. Astanteks LLC (Bukhara region)

14. JSC Bogatteks (Khorezm region)

15. JSC Hozarasp (Khorezm region)

16. JSC Turtkul PTShO (Republic of Karakalpakstan)

17. JSC Raykhon (Republic of Karakalpakstan) *

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