OREANDA-NEWS. The Tashkent region's Economic Court ordered to arrest the assets and block the bank accounts belonging to AKHANGARANCEMENT. The court ordered to arrest bank accounts worth more than 414 billion Uzbekistani som, and all key assets of the company.

A few days ago, on July, 21 2014, the Tashkent region'sEconomic Court sustained a claim of Uzbekistan's State Committee for the Privatisation, Demonopolisation and Support of Competition seeking to invalidate the AKHANGARANCEMENT privatisation that occurred 20 years ago based on the government's resolution.

EUROCEMENT group bought 75% of AKHANGARANCEMENT in 2006. It happened twelve years following the plant's privatisation documented in full conformity with the Uzbek laws applicable to the secondary market. The plant as part of the Group met all local laws, regularly paid taxes, contributed to the solution of social and environmental problems for as long as eight years. The results of comprehensive audits conducted at the plant from time to time, including on an unscheduled basis, did show full transparency and legality of the plant's activities.

'On July, 16 2014, we were informed about the lawsuit filed by the State Committee for the Privatisation, Demonopolisation and Support of Competition seeking to revoke the plant privatisation decree dated August 30, 1994. The Tashkent region's Economic Court accepted the suit on Thursday, July 17, 2014, the hearing date was set for Friday, and the ruling was made on Monday morning, in just a few hours. The claims lodged by the State Committee for the Privatisation, Demonopolisation and Support of Competition are ill-founded and unlawful subject to the evidence put before the court. We are intending to file an appeal with a higher court, and we will file a lawsuit with international courts pursuant to the international conventions and bilateral investment agreements,' EUROCEMENT group President Mikhail Skorokhod was quoted as saying.

AKHANGARANCEMENT, the second largest cement producer in Uzbekistan, controls around 30% of the domestic market. The plant regularly funds social projects in its operation area: financial support of children's sport and of the weightlifting team, construction of schools, swimming pools, restoration of an Orthodox church in the village of Soldatskoye, and Aktash sanatorium repair.

The plant exports its products to Kazakhstan, Kyrgyzstan, and Turkmenistan. In 2013, the plant increased cement production by 6% compared with 2012 - up to 1.62 mil tonnes.

In late June EUROCEMENT group and China CAMC Engineering Co., Ltd signed a USD 128 mil contract to supply equipment for the construction of a new dry-process cement plant as part of the AKHANGARANCEMENT plant. The new plant's capacity will be 2.4 mil tonnes of cement per year. The launch is expected in 2016.

Based on the EBITDA figures, assets and funds available in bank accounts, damage from the possible loss of AKHANGARANCEMENT could be estimated at USD 900 mil. After the plant's modernisation, the increase of its capacities from 1.8 mil tonnes to 4.8 mil tonnes of cement per year, and introduction of the more efficient dry technology, the said estimate will increase to USD 1.2-1.4 billion.

'EUROCEMENT group has 30 days to file an appeal beginning July 21, 2014. Should the court uphold the first ruling, this will essentially mean the expropriation of the asset. In 2012, the Uzbek authorities adopted the act preventing the privatisation results from being reconsidered or revoked,' said Mikhail Skorokhod.