BANK OF GEORGIA EQUITY AND CONVERTIBLE LOAN (DEBT & EQUITY)
02 Jun 1998
26 May 1998
Convertible loan to the second-largest bank in the country, to be used to fund medium and long-term investment projects of micro, small and medium-sized enterprises.
The project aims to: (i) assist management in helping the bank achieve international operating standards; (ii) provide medium-term resources for on-lending to clients; (iii) enhance the provision of retail banking services by the BoG; (iv) increase competition in the Georgian banking market; (v) improve BoG's corporate governance.
The project is expected to support competition and improve confidence in the banking sector.
Bank of Georgia (BoG) is the second-largest bank in Georgia with assets of 34.7 million Georgian lari (ECU 24.1 million).
The project will consist of a five-year convertible loan in the form of a credit line of US$ 7 million (ECU 6.4 million) in two equal tranches. It will be priced at US$ six-month LIBOR plus a commercial margin. The facility will provide the Bank with the opportunity to convert any amount outstanding into equity, up to an amount equal to 20 per cent of BoG's share capital.
US$ 7 million (ECU 6.4 million).
BoG will adopt the EBRD's Environmental Guidelines for Financial Intermediaries.
Technical assistance will be provided by EU TACIS in the form of an Institutional Building Programme.
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