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Caucasus Online investment
Diversified Azerbaijani group Neqsol Holding, controlled by businessman Nasib Hasanov, enteredthe Georgian telecommunications market by purchasing a 49% stake in Caucasus Online, Georgia’s largest internet service provider.
The former diplomat said that Neqsol Holding had already paid $61mn to buy the stake.
The deal has been questioned by Georgian authorities because it was allegedly not reported in due time.
Bryza said Neqsol Holding was surprised by the legislative process that took place in the Georgian parliament last week which resulted in the quickly expedited endorsement of a law allowing the Communications Commission to appoint a special manager for companies that fail to observe the commission’s decisions. According to him, the committee hearings held at midnight in an accelerated mode will have a negative impact on Georgia's investment attractiveness.
“This will certainly not have a positive impact on Georgia's investment climate. Consequently, until the Georgian government and parliament explain why they want the transaction to be cancelled, the case will remain problematic. The US and EU are already asking questions about what is the real reason behind this decision. As far as I know, the Parliamentary Assembly of the Council of Europe has already expressed its desire to apply to the Venice Commission regarding these changes. Accordingly, there will be appropriate pressure on the Georgian government as to why this decision was made. In particular, the Parliament of Georgia should explain why the decision was made so hastily,” Bryza said.
Neqsol Holding founder Hasanov has become the specific owner of the Caucasus Online shares, according to a document published on the website of the Georgian National Communications Commission (GNCC).
Before the change of ownership, Khvicha Makatsaria, a Georgian businessman, owned 100% of Caucasus Online. Currently, his stake stands at 51%.
Caucasus Online’s main asset is Georgia’s main channel for access to the internet.
In addition to being for a long time the largest ISP in Georgia, Caucasus Online has owned since 2008 a 1,200-km submarine fibre-optic cable laid across the bottom of the Black Sea between Georgia and Bulgaria to provide a direct, high-quality fibre-optic internet connection from Europe to the Caucasus region and the Middle East. In September 2016, Caucasus Online sold its retail business to Magticom and it is now a major wholesale operator in the region.
Caucasus Online was formed by the unification of several major Georgian ISPs in 2006 and in 2008 it merged with Telenet, the main provider of wireless and fibre-optic internet in Georgia.
Bryza advocated for a key role for Caucasus Online in the region.
“This is quite a big and important project, which is why I was interested in getting involved in it. Years ago I got to know the South Caucasus region, Central Asia and Turkey because of the East-West energy corridor. Projects such as the Baku-Tbilisi-Ceyhan and South Caucasus Pipeline projects have brought Central Asian energy resources closer to the European market. The digital regional hub project can perform a similar function, but already in the digital age,” he said.
57 GEORGIA Country Report August 2020 www.intellinews.com
