BGEO Group Demerged into two - a Banking Business and Investment Business

BGEO Group Demerged into two - a Banking Business and Investment Business

BGEO Group Demerged into two - a Banking Business and Investment Business

The FINANCIAL -- One of the largest sources of attracting foreign investment capital in Georgia - “BGEO Group” - has decided to function as two independent companies.

One of them oriented on the banking area (Bank of Georgia Group), while another will take investment business directions (BGEO Investments). The shares of both companies will be placed on the London Stock Exchange. This will be the third Tbilisi-based London-listed company for “BGEO Group”.

BGEO Group is a Georgia-focused investment platform source in Great Britain, which consists of companies such as Georgia Healthcare Group (GHG), m2 Real Estate (m2), Georgian Global Utilities (GGU) and “Teliani Valley”.

The decision made by “BGEO Group” in terms of functioning as two independent companies, will give enhanced growth opportunities to each of the businesses, leaders in their fields in the Georgian market. Each of these businesses will have more flexibility to manage their own resources and pursue their own strategy.

“This is a new stage in the development of the company and by this decision we have started writing a new history,” said General Director of “BGEO Group” and Chairman of the Supervisory Board of Bank of Georgia Irakli Gilauri. “Considering that the economy is growing rapidly and the banking and investment entities have achieved significant success, we believe that separate, independent development is the right method for their further growth. This decision, for Bank of Georgia and BGEO investments too, will be a great opportunity to maximize their lucrative positioning and acquire long-term potential.”

Both companies will have a fully independent supervisory board and management. Irakli Gilauri will lead “BGEO Investments” as Chairman of the Supervisor’s Board and General Director. The senior management team of Bank of Georgia (BOG) will continue to be led by Kakha Kiknavelidze as CEO, and will be unchanged from its current structure. The Supervisor’s Board at Bank of Georgia will be led by Neil Janin (non-executive, independent chairman of “BGEO Group”).

“We believe that formulating BGEO Group as two independent companies, will have a positive influence on the Bank’s results, mainly on the corporate banking systems. As a result of this novelty, our corporate banking portal will grow, even in the sector where BGEO Group’s investment direction operates.

If Bank of Georgia had any restrictions on crediting BGEO Group’s portfolio companies before, this change will lift all of these borders and BOG will be given more opportunities to build up. Changes in the retail direction are not planned. We must focus on the accumulation of assets, because Georgia has great potential to become a centre of private banking in the region,” said Kakha Kiknavelidze, General Director of BOG.

The decision made by “BGEO Group” must be approved by the Shareholders Council of the company. The process will last for several months and will presumably be over in the first half of 2018.