Uzbekistan’s Fonon Jewelry Factory State Stake Offered at 316.7 Billion So’m Amid Financial Challenges
The state aims to sell full ownership in Fonon Jewelry Factory’s parent company with significant debts impacting its financial health.
State Auction Puts Fonon Jewelry Factory’s Parent Company on Sale
The Uzbek government has announced an open auction to sell its entire 100% stake in Gold Moon Tashkent, the parent company owning the Fonon Jewelry Factory. The starting price for the stake is set at 316.7 billion Uzbek so’m, with the auction scheduled for September 28.
The Fonon Jewelry Factory, established in 2021 on the basis of a former scientific-production enterprise, has faced years of financial difficulty. Though it reported a net profit of 33.4 billion so’m in the first half of 2026, previous years saw losses, and the company’s liabilities continue to exceed its assets by over 107 billion so’m as of July 1, 2026.
Potential buyers will inherit not only the ownership but also a substantial creditor debt totaling 305.9 billion so’m, alongside a smaller debtor amount of 13.2 billion so’m. Additionally, commercial bank restrictions are imposed on the company’s buildings and facilities, though the exact details have not been publicly disclosed.
"The buyer will assume all creditor and debtor obligations linked to the company, highlighting substantial financial risks involved in the acquisition."
Financial Overview and Implications for Households and Investors
Despite a gradual improvement in the company’s financial indicators—such as a reduction in net losses from 12.3 billion so’m in 2024 to 7.8 billion so’m in 2025—the balance sheet still reflects a negative net asset position. Total assets stood at 443 billion so’m against liabilities of 550.3 billion so’m as of mid-2026.
The company boasts 2.56 hectares of land in the Chilonzor district of Tashkent and buildings totaling 11,370 square meters, with a book value of fixed assets at 110.7 billion so’m and a depreciation rate of 33.2%. Revenue was slightly down by about 1% in 2025 compared to the previous year, at approximately 413.8 billion so’m.
For everyday consumers and investors, the sale underscores several points worth noting. First, the acquisition’s financial complexity could influence the local jewelry market and related jobs, given the factory’s significant workforce, estimated between 309 and 459 employees depending on the source.
Moreover, the auction conditions do not impose mandatory commitments for the buyer to invest additional funds or retain/create jobs, raising concerns about the factory’s future operational stability. The option to pay in installments over up to 36 months with interest tied to the Central Bank’s key rate presents potential risks and opportunities for investors with long-term perspectives.
Currency stability and household budgets may be indirectly affected if the factory’s performance influences local gold and jewelry pricing or employment in the sector. Similarly, the state’s move to divest this asset reflects broader trends in privatization, which could reshape Uzbekistan’s industrial landscape.
Legal and Operational Nuances
While the "Fonon" name is associated with both the factory and a jewelry house, these are legally distinct entities. The auction only covers the 100% state stake in "Gold Moon Tashkent," not the jewelry retail network or trademarks such as those managed by "Empire Jewelry" LLC. This separation could impact brand continuity and consumer perceptions.
Overall, this sale is a significant development in Uzbekistan’s industrial privatization efforts. Households and investors should monitor how these changes might affect the affordability and supply of jewelry products as well as employment in the sector.
