The consortium recently signed a contract with the Uzbek government to acquire a 47% stake in Yolref Trans, a small-sized state-run railway firm, for US$25.2 million. The firm posted a net profit of 3.1 billion won from sales of 12 billion won in 2006.

"Uzbekistan has been privatizing state-owned companies on an order from the president as part of economic development projects," a Shinhan official said. "We’ve decided to invest in Yolref Trans because it has growth potential. Railways are a key means of transportation in Uzbekistan."

The consortium was set up by Shinhan, Shindong Enercom, an overseas resources developer, and Eurasia Investment Holdings, according to the bank. It plans to list the firm on the stock market in London, Korea Times reported.

Shinhan said the consortium will jointly manage the railway network owned by Yolref Trans with Uzbekistan’s railway authorities. However, the decision to name the chief executive of the company is up to the consortium.

Shinhan Bank, a subsidiary of the country’s second largest financial services provider, Shinhan Financial Group, invested US$5.25 million to gain a 14% stake in Yolref Trans.

Oil-rich Central Asia has drawn keen attention from developers around the world. China has been setting up extensive railway links to Kyrgyzstan, Uzbekistan and Kazakhstan to enhance the competitiveness of Chinese oil companies’ bidding for energy assets in those countries.

China’s move has alarmed oil companies in the United States and India seeking oil assets in Central Asia, according to South Korean officials.