Russian and Uzbekistan may sign an agreement on integrating the Chkalov Tashkent Aviation Production Association into the Associated Aviation Construction Corp. (AACC) on 28-29 November, Russian Kommersant newspaper reported on 22 November.

A controlling stock package of 50% plus one share in the Tashkent plant may be exchanged for a package of AACC stock, the size of which will be determined after the Tashkent plant is assessed. That assessment is currently underway.

The Tashkent plant would enter AACC when the latter issues additional stock worth US$500 million-US$1 billion in the second quarter of next year.

Il-76 and Il-114 planes are made in Tashkent. The plant’s assets are worth US$132.5 million and its net profit last year was over US$4.4 million. Ownership of the plant breaks down as 51% in state hands, 10% belongs to the employees, 6.7% belongs to the National Bank for Foreign Economic Activity and the Ministry of Foreign Economic Ties and 25.6% of its stock is in circulation.

AACC acknowledges that the purchase is politically motivated. "In response, Uzbekistan met Russia halfway on a number of strategic issues," a corporate source said. One of those was the transit of natural gas. The Tashkent plant has been problematic for Russia. It was included in a US$1-billion Rosoboronexport contract with China for 38 Il-76 planes in 2005, but it refused to fulfill the contract at the end of last year.

AACC will create a business plan for the Tashkent plant by March of next year. Although the plant has 50 planes started now, a source at AACC described it as only suitable for "piecework" assembly of Il-76 models, the report added.