Page 51 - GEORptMay21

Georgian oil company GOGC refinances $250mn eurobonds with EBRD loan
Galt & Taggart places fifth $2mn bond for Georgian Leasing Company
The European Bank for Reconstruction and Development (EBRD) is to extend a €217mn senior unsecured loan to state-owned Georgian Oil and Gas Corporation (GOGC) for the refinancing of a $250mn eurobond that matures in April 2021, the EBRD said in a statement.
The funding agreement was made in response to the economic shock caused by the coronavirus (COVID-19) pandemic.
In addition, the financial package is to support planned reforms at the state company, including the development of a natural gas exchange.
The loan will improve the liquidity of GOGC, which has been damaged by the economic impact of the COVID-19 crisis, and will alleviate difficulties in tapping the capital market, the EBRD said.
The corporation is one of the largest state-owned companies.Its revenue increased by 37% to Georgian lari (GEL) 880.6mn ($330mn) in 2019. Net profit fell 22.8% to GEL121.4mn in the year. Despite declining profits, GOGC was still one of the most profitable state-owned enterprises in Georgia in 2019.
The total assets of GOGC include main gas pipelines, as well as the combined cycle power plants Gardabani 1 and Gardabani 2—the latter of which was officially put into operation at the end of 2019. The two power plants account for 20% of the country's electricity consumption and also provide balancing system services for intermittent production at hydropower plants.
It was in 2012 that GOGC issued a $250mn eurobond and listed it on the London Stock Exchange. In April 2016, it refinanced the eurobond, with a deadline for repayment of April 26, 2021.
Galt & Taggart has announced that it secured the successful placement of another $2mn of 2-year bonds of Georgian Leasing Company to be listed on the local stock exchange.
This is the fifth issue for Georgian Leasing Company, which is said to show the stability of the company and the high degree of trust from investors. “Considering the events of the current year, the successful completion of this issue is a very positive sign for both the company and the Georgian securities market,” G&T’s press release stated.
The bonds have a fixed 7.5% annual coupon.
The securities will be admitted to the local stock exchange and, consequently, the accrued interest will be exempt from taxes.
The bond will be fully repaid on August 31, 2022.
"The demand for bonds has exceeded our expectations, which is very gratifying, especially considering what is happening in the world today. All this, of course, testifies to the very high credibility of our company and the high professionalism of Galt & Taggart," said Eldar Akhvlediani, general director of the Georgian Leasing Company.
51 GEORGIA Country Report May 2021 www.intellinews.com