Why is this important
The Ba3 rating is maintained not by finances, but by state support — protection from competition. Sales have been falling for two years, the cash flow has been negative — the company survives by installment payments and debt accumulation. The GM license expires in 2027, there is a risk of technology loss.
What happened
- Sales -3%, revenue -8% to $4 billion, debt/EBITDA 1.6x (from 1.3x);
- Negative cash flow for two years;
- The Ba3 rating was maintained thanks to state support, dominance of 82%;
- May 2026: repayment of $300 million, refinancing with new bonds;
- Liquidity of $44 million with a turnover of $4 billion.
Financial indicators
12 months until June 2025:
- Production: 378,000 cars;
- Revenue: $4 billion (-8%);
- EBITDA: $471 million;
- Sales: -3%;
- Debt/EBITDA: 1.6x (with 1.3x).
Cash flow: negative for two consecutive years due to the outflow of working capital (transition to installment payments).
Reasons for fall
- Transition to installment payments: the company sells cars for installment payments, freezing working capital — an increase in the debt burden, a negative cash flow.
- Demand decline: outdated models (Cobalt, Damas, Labo), high prices, competition with Chinese cars.
Refinancing
- May 2026: repayment of €300 million in Eurobonds.
- Plan: issuance of new bonds for 5 years under the Ba3 rating.
- Risk: Moody’s assumes that the placement may not happen — then alternative financing.
Debt Structure (September 2025)
- Bonds: $300 million (senior unsecured).
- Banks: $77.2 million (international).
- Ipoteka Bank: $50 million (for vehicle reserves).
- Kapitalbank: $80 million (loan line, fully utilized).
Liquidity
- $44 million: cash funds as of June 30, 2025 — small with a turnover of $4 billion.
- Forecast: $530 million from operations for 18 months will go to working capital, capital expenditures of $105 million, and dividends.
- Credit line: $80 million in Kapitalbank has been fully utilized, will be repaid after bond placement.
Domestic support is the basis of the rating
- Base score b1: three steps below Ba3 — weak creditworthiness.
- Ba3: thanks to government support.
Support factors:
- Dominance of 82% of the market;
- Strategic role (available auto);
- Government control (control package);
- Protection from competition (utilization fees, import barriers, benefits).
Monopoly
- 82% рынка: благодаря защите от конкуренции.
- Utilization fees: increase for electric vehicles from May 1, 2025 — protection of UzAuto from BYD, Chinese brands.
- Import barriers: restricting access to modern, affordable cars.
- Consequences: Consumers are limited by outdated models at inflated prices.
GM License
- Until 2027: agreement with General Motors on the production of Chevrolet (Cobalt, Damas, Labo).
- Risk: After 2027 loss of license — no own technology, R&D.
- Moody’s: lowering the rating if the license doesn’t extend or conditions worsen.
Competition
- Private manufacturers: competition is growing, but is being controlled by the government to protect UzAuto.
- BYD: Uzbekistan’s electric vehicle production is UzAuto’s competition, but recycling fees are limited.
Export
- 11% to Kazakhstan, Georgia, Armenia, Kyrgyzstan.
- Main support: 325 billion was allocated in 2022 to pay the recycling fee for exports to Georgia, Belarus — expenses for taxpayers.
Moody’s forecast
- Stable: sales stabilization is expected, positive cash flow in 12-18 months, refinancing of $300 million.
- Improvement: if Uzbekistan’s rating rises, export growth, debt/EBITDA < 3.5x.
- Decline: if Uzbekistan’s rating decreases, sales will fall, debt/EBITDA ~4.5x, liquidity will weaken.
Context
- The Ba3 rating is not for quality: it’s for state support and protection from competition.
- Sales decline, revenue: outdated models, high prices, transition to installment payments.
- Monopoly 82%: due to recycling fees, import barriers — consumers suffer.
- GM license until 2027: the risk of losing technology, dependence on the American auto giant.
- Negative cash flow: two years — the company survives by accumulating debt.
