A client approached BNC FINANCE after being offered the opportunity to acquire approximately 8% of the shares in an open joint-stock company that owned a land plot with aging office and warehouse buildings.

The client was initially interested in acquiring this stake because they leased warehouse space from the company and wanted to secure protection against future rent increases or the potential termination of the lease agreement.

The client engaged BNC FINANCE to identify additional investors interested in participating in the acquisition, and we subsequently took on the full legal and strategic support of the project.

Our valuation revealed that the offered 8% stake was significantly undervalued.

An analysis of the company’s shareholder structure showed that no individual shareholder held a controlling interest. However, a group of shareholders who were also members of the company’s management collectively owned just over 54% of the shares. Approximately 36% of the shares belonged to shareholders who were not involved in management, while the remaining shares were owned by deceased shareholders, individuals who had relocated, or shareholders who had not participated in general meetings for many years.

The company’s principal assets consisted of 3.3 hectares of land together with approximately 4,000 square meters of office, warehouse, and other buildings.

For more than ten years, the company had ceased operating in the business for which it had originally been established and instead generated income solely by leasing office premises, warehouse facilities, and land.

The company had no outstanding liabilities or creditors.

Following our analysis, the investors decided not to limit the acquisition to the initial 8% stake but instead pursue the acquisition of a blocking stake (34%).

The initial 8% was acquired immediately. The remaining 26% became the subject of active competition between our investor group and the existing management.

Negotiations with several shareholders were completed successfully, allowing additional shares to be purchased. Approximately 7% of the company’s shares were owned by an investment fund that received competing offers from both parties. To ensure a fair process, we proposed an open auction. Our investors submitted the highest bid and successfully acquired the fund’s shares, significantly increasing their ownership.

Ultimately, we secured the 34% blocking stake.

The next stage involved negotiations with the management shareholders for the acquisition of their controlling interest. After several months of negotiations, our investors successfully purchased their shareholding and obtained control of the company.

Following a comprehensive financial assessment, the investors concluded that continuing to lease the company’s real estate—even at prevailing market rates—was no longer economically viable.

At the Annual General Meeting of Shareholders, the financial performance of the company was reviewed, and a proposal was adopted to demolish obsolete and inefficiently utilized buildings.

This coincided with a period of rapid urban development in Bishkek. The shareholders, including minority shareholders, supported the redevelopment strategy. Only the structurally sound buildings and the administrative office were retained and renovated, while the remaining obsolete structures were cleared.

Our team continued to advise and support the investors through to the successful sale of the land plot to a property developer.

The transaction generated substantial returns for both the investors and the remaining shareholders, marking the successful completion of the project.