Page 58 - GEORptFeb21

Air Georgia to launch passenger transport services, possibly low-cost
the ratings being further notched down from the sovereign's, and a downward reassessment of the company's Standalone Credit Profile (SCP), resulting from a deterioration of the financial profile with net debt/EBITDA sustainably above 9x as per the rating case.
Georgian Railway issued, in May 2012, $500mn worth of 10-year bonds denominated in US dollars and carrying a 7.75% coupon. The bonds mature in November 2022.
According to Fitch, key assumptions for the ratings case were operating revenue growth on average at 3.9% in 2020-2024 and operating expenditures growth on average at 4.9% in 2020-2024.
According to Fitch, GR receives mostly non-cash and indirect state support. “Historically, support of GR's long-term development has been via state policy incentives and asset allocations. GR enjoys greater pricing power than its Fitch-rated regional peers. GR's tariffs are fully deregulated, allowing tariffs in both freight and passenger segments to be adjusted to market conditions. Freight tariffs are set in US dollars, resulting in natural hedge for a company that operates in a country with a dollarised economic environment,” Fitch said. The ratings agency considered a potential default of GR on external obligations as potentially harmful to Georgia, as it could lead to reputational risk for the state.
“Both GR and the state tap international capital markets for debt funding, as well as loans and financial aid from IFIs. This leads us to assume that a default of GR could negatively influence the cost of external funds for future debt financing of other GREs or the state itself. It could also significantly impair the borrowing capacity of the latter due to potential reputational damage and the small size of the domestic economy,” Fitch Ratings said.
Giorgi Kodua, founder of the Hub Georgia organisation that addresses transport issues, has confirmed that his cargo carrier Air Georgia will receive its first Airbus A320 passenger aircraft on October 20 as it moves into passenger transport.​ Another such aircraft is expected within a month, with two more to arrive in December and March, respectively.
“The planes are new and are currently in the United States,” Kodua said in September when he announced his intentions for the first time. “[N]egotiations are underway with the investor,” he said at that time.
Air Georgia will operate as a low-cost carrier, charging fares even lower than those charged by Wizzair according to Kodua, but only if Georgian airports offer the same terms as they offer to Wizz Air, he stressed.
"As you know, we are negotiating with the government and if Kutaisi Airport gives us the same conditions as Wizz Air has, then after registering the plane, we will transfer it to Kutaisi and start flights from there," said Kodua.
However, if the state does not award Air Georgia conditions similar to those enjoyed by Wizz Air, the company will continue flights from Tbilisi at normal prices, he added.
9.2.2 ​TMT corporate news
Georgian Media Production Group for sale
Georgian Media Production Group, which includes local TV channels Imedi and GDS and Radio Imedi among its assets, is for sale, Agenda.ge has reported.
The Communications Commission of Georgia discussed the proposed sale at a meeting on January 28 and gave its consent to the acquisition of 100% of the shares of Georgian Media Production Group.
The group is owned by Ina Gudavadze, widow of oligarch Badri
58​ GEORGIA Country Report​ February 2021 ​ ​www.intellinews.com