Uzbekistan since leaving the former Soviet Union has made significant efforts to distance itself from past links with the communist empire.
A part of Central Asia that not so very long ago few had heard of let alone visited. After leaving the Soviet Union in 1991 Uzbekistan tried hard to open its doors to tourism.
Hotel Uzbekistan opened in 1974 and catered largely for Soviet diplomats visiting the capital, Tashkent.
The hotel is described as a classic example of Soviet 1970’s modernist architectural style, and has been both heralded and condemned as such. For many of the city’s natives it is a monument to the past that is best forgotten, but not all.
Uzbekistan hotel acquisition – the bid process
In 2018, the government of Uzbekistan put Hotel Uzbekistan up for sale and advertised it worldwide. The sale would take place through auction with a starting bid of $33 million. The auction attracted little interest and no bids, so the government gradually decreased the price.
Last week an ‘investment group’ based in Singapore acquired an 80% interest in the hotel for $23.2 million in a competitive auction, announced by Uzbekistan’s State Asset Management Agency. The state will retain a minority stake. The acquiring company is the Bashan Investment Group PTE Ltd.
Bashan Investment Group PTE Ltd is both a holding and a television production company founded in 2005.
The acquirer now plans to invest a further $40 million in refurbishing the hotel to its former glory. A rather unusual objective given the hotels location and the country’s ambition to shake off its past.
Uzbekistan has set increased private ownership as one of the reforms to the state-controlled economy. Earlier last month the government said it was also considering foreign management of the state-owned airline and airports.
Uzbekistan hotel acquisition – fortuitous
Foreign investment in Central Asia often looks suspiciously circular, possibly originating from the home country, re-routed through offshore companies, and re-invested in the country.
Bashan out bid the five other companies that tendered, from Turkey, UAE, and the UK. The State Asset Management Agency managing the process did not reveal their names.
It is fortuitous that a previously unknown television production company from Singapore would acquire a landmark hotel.
By not publishing the names of the other companies participating in the tender, eyebrows have been raised in Uzbekistan and by potential foreign businessmen in its execution.
Maybe Soviet authenticity was priced into the deal.
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