Page 57 - GEORptDec20
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9.2.4 Utilities corporate news
Georgian businessman picks up 25% of electricity distributor Telasi as sole bidder at auction
Fitch downgrades Georgian water utility GWP
Best Energy Group, a two year-old company founded and wholly owned by businessman Khvicha Makatsaria, has bought 24.5% of major Georgian electricity distribution company JSC Telasi from the state. The sale took place in a public auction at the starting price of Georgian lari (GEL) 32.4mn ($10.5mn).
Makatsaria is also a shareholder in Caucasus Online and owns a controlling stake in Tbilisi Energy.
Best Energy Group was the sole participant in the auction.
The controlling stake in Telasi, amounting to 75.11%, is held by Silk Road Holdings B.V., a company registered in the Netherlands and founded by Russian energy group InterRAO.
Telasi’s total revenues in 2019 amounted to GEL453mn ($151mn). Net profit stood at GEL14mn ($4.66mn).
The company distributes electricity to Tbilisi and the surrounding area, to both households and companies.
Fitch Ratings has downgraded Georgia-based Georgian Water and Power’s (GWP’s) long term foreign debt Issuer Default Ratings (IDR) to B+/stable from BB-.
The ratings agency simultaneously withdrew the GWP ratings.
The downgrade followed the alignment of GWP's ratings with those of its parent, Georgia Global Utility (GGU; B+/stable), reflecting strong ties between the two, including direct funding from the parent following the recent refinancing of all outstanding debt with a loan from GGU and the provision of guarantees to GGU's noteholders by GWP.
Fitch expected GWP to be the most significant operating company for GGU at 72% of average revenue and 60% of average Ebitda per year for 2020-2024. The GWP rating is supported by the company‘s natural monopoly position, solid profitability, improving regulatory environment, reduction of water losses, good receivable collection rates, asset ownership and low sector risk. This is offset by FX risk, worn out water infrastructure, and a group structure with related-party transactions (albeit decreasing and on market terms).
57 GEORGIA Country Report December 2020 www.intellinews.com
