The FINANCIAL — Investment Group BGEO, the leading Georgian industrial group, has issued bonds worth USD 350 million. The seven-year bonds are the longest-dated issuance by a Georgian private company in international capital markets. Attracted investments will contribute to further development of Georgian businesses. Draw on such a huge sum by one Georgian group is considered a litmus of the attractiveness of Georgia for foreign investors.
“Over 90 institutional investors from the US, UK, Switzerland, Germany, Austria and other countries placed orders, which we are delighted about given the current market conditions.
Attracting USD 350 million is certainly not easy. This financial resource is seven year termed with a historically low interest rate. The yield was determined at 6%. It means that the risk of our country as an investment destination has been reduced for them. So this fact alone is a good example to say that investors’ interest towards Georgia is high,” Irakli Gilauri, CEO at Investment Group BGEO, told The FINANCIAL.
According to Gilauri, some of the countries of our region are still having quite weak economies, meanwhile it does not have a negative impact on Georgia. “Investors interested in our region are choosing a country with a better performed economy. Accordingly, they consider Georgia which has the better and most transparent economy.”
“I would not say that the ongoing economic difficulties have brought any benefits to Georgia. The fact is that when all the countries are having positive economic growth, the competition is higher. The existing benefits of the Georgian economy have become more visible for investors right now,” he explained.
Investment Group BGEO is a Georgian company and operates in several key sectors including banking, healthcare, real estate, utilities and insurance.
Since 2004, investment volume attracted by the Group has exceeded GEL 8 billion. It was the third time of issuing bonds. The first was issued in 2007, worth USD 200 million, and the second time in 2012, worth USD 400 million.
The bond issuance process has been led by Bank of America Merrill Lynch, JP Morgan and Galt & Taggart. Investment rating companies Fitch Ratings and Moody’s have assigned JSC BGEO Group’s senior unsecured USD 350 million notes a final long-term rating of “BB-” and “B1” respectively. The bonds are listed on the Irish Stock Exchange.
BGEO has a long-term issuer default rating (IDR) of “BB-” with a stable outlook, short-term IDR of “B”, viability rating of “BB”, support rating of “5” and support rating floor of “No Floor”.
“We invest these financial resources in Georgian companies. Their expansion, development and integration with western standards is crucial for the overall economy of our country and its stability. Bank of Georgia and Georgia Healthcare Group (GHG) are companies from Georgia that has been listed on LSE. Considering our experience we want to see other BGEO Group companies on different international capital markets, including LSE,” said Gilauri.
The years of experience of the team, their high professionalism and western standard of governance encourages Gilauri to expect to attract more investments to Georgia.
“Transparency, high standards of corporate governance, management quality and exact understanding of investors are crucial for attracting investors. All these criteria are basic for attracting financial resources,” he said.
As Gilauri said, raising corporate governance at the top level is the key factor that will help businesses to attract foreign capital. He added that “we do have companies in Georgia with high corporate governance, which can succeed in raising their capital in cooperation with international funds,” Gilauri told The FINANCIAL.
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