Page 35 - GEORptApr19

average at 5.0%, which compares favourably with the current median for peers of 3.1%.
The 2018 fiscal outturn, an estimated augmented deficit of 2.5% of GDP, including budget on-lending, outperformed the authorities' 2.8% initial target and current BB median, due to strong revenue performance and delayed implementation of infrastructure projects, meaning public capex was subdued.
Fiscal policy is consistent with a gradual decline in gross general government debt (GGGD)/GDP, which Fitch forecasts at 42.5% of GDP in 2019, lower than the current BB median of 48.1%. With 81% of total GGGD external, it is vulnerable to exchange rate fluctuation.
8.5 Fixed income
8.5.1 Fixed income - bond news
Georgia’s Silknet raises $200mn with eurobond issue
Anaklia deep sea port consortium in Georgia plans to issue shares
Silknet, Georgia’s leading telecommunications operator, on March 27 announced that it has successfully raised $200mn from a 5-year, senior unsecured eurobond issue priced at 11%.
The subsidiary of Silk Road Group is the largest telco in the entire South Caucasus region.
“Investors taking advantage of this issuance will benefit from unrivalled exposure to Georgia, the former CIS's most promising success story for its entrepreneurial business environment,” said David Mamulaishvili, Silknet’s CEO.
Silknet is wholly-owned by Rhinestream Holdings Limited, an entity incorporated in Malta. It is ultimately controlled by Giorgi Ramishvili, the founder of Silk Road Group.
Last March, Silknet paid $152mn for 100% in Georgia’s largest mobile operator Geocell , which has a 35% market share. Silknet at that point said at that time that it held 41% of Georgia’s fixed internet segment, 30% of the broadcast transit (pay TV) segment and 48% of the fixed telecoms segment.
The $200mn bond was subscribed to by investors from a wide range of geographies. The paper is expected to be given a rating of B1 by Moody’s and B+ by Fitch, in line with Silknet’s long-term issuer credit rating.
The bond is set to be listed on the Global Exchange Market of Euronext Dublin. JPMorgan, UBS and TBC Capital were joint lead managers. Dentons UK and Middle East and Dentons Georgia were legal advisors to Silknet, while Latham & Watkins and BGI Legal were acting as legal advisors to the joint lead managers.
Anaklia Development Consortium (ADC) intends to issue shares in the planned Anaklia deep sea port project in Georgia. It has addressed the National Bank of Georgia on the issue, InterPressNews has reported.
It remains unclear why Georgia’s central bank should green light ADC issing shares.
ADC is a consortium of Georgia’s TBC Holding, Conti International from the US, SSA Marine from the US, Wondernet Express from the UK and G-Star LTD from Bulgaria. The consortium won a tender to develop, own and then transfer to Georgia a deep water port on the Black Sea in Anaklia. The decision on awarding the contract to the consortium, led by Georgia’s leading bank TBC, is said to have created big tensions between Giorgi Kvirikashvili,
35 GEORGIA Country Report April 2019 www.intellinews.com