Page 66 - GEORptSep22

Georgian Airways files for insolvency, put up for sale
The airline's freighter fleet currently has one B737-800BCF and one B737-800SF. The B737-800BCF has the capacity to carry 23.9 tonnes and fly an additional 3,750 kilometres compared to the existing B737 Classic versions.
Georgia’s national airline, Georgian Airways, has been put on the block after the carrier filed for insolvency. Listed for an asking price of $150mn, the 28-year-old airline said that the pandemic-induced collapse of air travel forced the company to the verge of bankruptcy.
Since 1993, “we have proudly flown under the Georgian flag. We have not stopped flying even in the hardest periods for Georgia”, the company said in a January 18 statement. “But the air travel industry has been hit hard by the sudden drop in flights and, unfortunately, Georgian Airways was no exception.” Owing upwards of $57mn in debts to more than 70 corporate partners and 16,000 passengers, the company went into debt proceedings on January 11. A court approved the carrier’s insolvency management plan late last year, and the company has been listed for sale on a broker’s website.
Georgian Airways continues to carry out flights even as it goes into debt proceedings. The carrier performs up to eight scheduled flights a day – to select European capitals and other post-Soviet and Middle Eastern destinations – and employs 473 people. With its assets estimated at a modest $7mn, the company is 80%-owned by its general director, Davit Gaiashvili.
As of 2019, Tel Aviv and Moscow were the company’s most popular destinations. Georgian Airways also had the second-largest share of passenger load in and out of Georgia that year, behind only the global giant Turkish Airlines.
But the company suffered a major blow in 2019 when Moscow banned direct flights to Georgia in response to anti-Russia protests in Tbilisi. The airline reportedly sustained $30mn in losses because of the Russian embargo. Separately, it faced growing competition from budget airlines and feuded with TAV Urban Georgia, a Turkish corporation operating the two main airports in Georgia, over airport fees.
The coup de grace came the following year, when the COVID pandemic grounded planes around the world. The airline’s sales listing reported that in 2019 it carried about 500,000 passengers, about 10% of the passengers who travelled in and out of Georgia. By 2021, according to the Georgian Civil Aviation Agency, it carried under 73,000 passengers, about 3% of the country’s total.
9.2.3 TMT corporate news
Eurobond recall from Georgian internet provider Silknet ‘highly likely in Q2 2022’
Georgian internet provider Silknet’s performance improved considerably in Q2, boosted by a faster than expected recovery of the Georgian economy and a gradual revival of tourism, Galt&Taggart reports.
The company generated GEL 197.8mn (+6.9% y/y) in revenue and GEL 100mn (+4.5% y/y) EBITDA in H1 (excluding IFRS 16). Mobile data continued to drive growth in H1, however favourable results were also seen in other segments. Namely, fixed broadband revenue was up 1.5% y/y, while pay-TV revenue was up 5.0% y/y on the back of increased ARPUs. Notably, Silknet lagged behind Magticom in new customer acquisitions in the fixed broadband and pay TV segments, explained by Magticom’s aggressive strategy to penetrate rural areas.
Despite a strong performance in terms of revenue, the company’s profitability margins slightly deteriorated in H1, with an adjusted EBITDA margin at 53.9% in H1 2021 vs 55.2% in H1 2020. This decline stemmed from increased
66 GEORGIA Country Report September 2022 www.intellinews.com