Tatneft buys Uzbek tire producer

MOSCOW. Jan 30 (Interfax) - Russian oil company Tatneft signed a contract with Uzkimyosanoat and Uzkimyoimpex on January 20 to buy 100% of tire producer Birinchi Rezinotexnika Zavodi (BRZ), Uzkimyosanoat said.

International law firm White & Case advised on the transaction.

It was reported earlier that an agreement on the deal was reached in early December during Russian Prime Minister Mikhail Mishustin's visit to Uzbekistan.

The Uzbek company said that "Tatneft assumed all existing credit obligations and debts, and subsequently an agreement was reached on the purchase of new types of industrial rubber products for $80 million."

Prior to the sale, Uzkimyosanoat owned 91.8% of BRZ and Uzkimyoimpex held 8.2%. Last October, Deloitte valued the plant, with all credit obligations and debt in the amount of UZS843 billion (about $75 million).

It was reported that Tatneft and Uzkimyosanoat planned to form a joint venture based on BRZ under an agreement signed in November 2019. BRZ was expected to be integrated into Tatneft's tire business.

BRZ was founded in 2014 with a presidential decree on measures to organize construction of a rubber products plant in Uzbekistan's Angren free industrial zone. The plant started production in July 2018 with annual capacity to manufacture 3 million automobile tires, 200,000 farm machinery tires and 100,000 linear meters of conveyor belts.

The plant produced 244,900 automobile tires, 4,630 farm machinery tires and 29,700 meters of conveyor belts. The tires are made under the BARS brands.