Georgia Capital Eurobond

Location:

Georgia

Project number:

49834

Business sector:

Manufacturing and Services

Notice type:

Private

Environmental category:

B

Target board date:

27 Feb 2018

Status:

Signed

PSD disclosed:

13 Mar 2018

Translated version of this PSD: Georgian

Project Description

Subscription of up to US$ 60 million to the Georgia Capital's proposed inaugural Eurobond to be listed and traded on the Irish Stock Exchange. This will be the first private corporate (non-sovereign and non-financial institution) Eurobond issuance from Georgia.

Project Objectives

The operation will enable the Georgia Capital to access long term international capital markets and diversify its funding sources, which will facilitate further growth of its existing subsidiaries by financing their robust expansion and modernisation plans as well as engage in further investments in existing or new sectors.

The bond proceeds will be on-lent to Georgia Capital's investment business subsidiaries to finance their capital expenditure needs and will also be used to refinance existing debt at company level.

Transition Impact

The expected transition impact of the project is derived from the demonstration effect related to the introduction of a new financing instrument and the setting of higher standards of issuance and transparency compared to local market standards.

Client Information

GEORGIA CAPITAL JSC

Georgia Capital is a holding company of a diversified group of businesses operating in healthcare, insurance, beverages, power & utilities and real estate. As of 31 December 2017, the Company generated revenues of US$ 150 million and EBITDA of US$ 46 million and reported total assets of US$ 1,078 million. The Issuer employs more than 16,000 people across its subsidiaries in Georgia and is one of the largest employers in the country.

As of today, the Issuer is ultimately 100 per cent owned by the LSE Premium Listed BGEO Group Plc (constituent of the FTSE 250 Index). BGEO Group Plc operates as a holding company with its two main assets being JSC Bank of Georgia ("BOG") and JSC Georgia Capital.

EBRD Finance Summary

USD 60,000,000.00

Up to US$ 60 million to the Georgia Capital's proposed Eurobond of up to US$ 300 million.

Total Project Cost

USD 300,000,000.00

Environmental and Social Summary

Categorised B (2014 ESP) Given the nature and rules of capital markets transactions, the Bank's Environmental & Social Due Diligence (ESDD) has been based on a review of publicly available information obtained through the Environmental & Social due diligence questionnaire completed by JSC BGEO Investment. This review showed that JSC BGEO has an adequate Human Resources and Safety policies that are in compliance with EBRD's PR2 and 4. The existing portfolio companies (e.g. beverage, water company, property development and insurance) have limited environmental and social risks and are in compliance with national environmental and social laws. At the moment, JSC BGEO does not have overarching environmental and social risk management procedures.

For the project, GSC BGEO is required to develop such risk management procedures for future investments in line with the Bank's Performance Requirements, as well as the submit an annual environmental report to the Bank. These requirements will be incorporated into a Framework Agreement.

Technical Cooperation

None.

Company Contact Information

Giorgi Alpaidze
g.alpaidze@bgeo.com
+995 322 444 190
+995 322 444 444
www.bgeo.com

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