Prime Minister Promotes Georgian Railway Eurobonds in London

Georgian Prime Minister Nikoloz Gilauri, his counselor Vato Lezhava and Minister of Economy and Steady Development Vera Kobalia left for London on July 7 and held a road show for drawing the interest of foreign investors towards the Georgian Railway Eurobonds.

The Georgian delegation met with foreign businessmen, Thomas Mirow, president of the European Bank for Reconstruction and Development (EBRD), and JP Morgan investment bank representatives.

The meeting was organized by JP Morgan and focused on placing Georgian railway securities at the London Stock Exchange (LSE).

The Georgian delegation stayed in London for 2 to 3 days and has already returned to the homeland.

The Georgian Prime Minister's press service says Georgian Railway bonds will be expectedly placed at LSE in mid July.

Georgian Railway is expected to issue bonds worth 250 million USD with the maturity period of five to seven years.

The Georgian government discussed a draft resolution on issuing, placing and registering foreign currency denominated loan securities of Georgian Railway at the London Stock Exchange PLC on June 10.

Georgian Railway has already started preparing required documentation for the IPO transaction and launched negotiations with a consortium of JP Morgan and Merrill Lynch in London.

Giorgi Gagnidze, Georgian Railway commercial manager, told GBW the volume, maturity and all other details for placing Georgian Railway bonds will be specified in mid July.

"At this stage, we are conducting negotiations with the consortium on expected results of placing the bonds, taking into account the current market tendencies. The very market analysis will determine the volume, maturity, interest rates and all other details", Gagnidze noted.

It is worth noting on May 10 Fitch Ratings, international rating agency, conferred a rating of B+ to Georgian Railway with the forecast of Stable. The Georgian Railway rating equals to Georgia's sovereign rating.

The collected funds will be spent on implementing Tbilisi-Batumi fast train project.
In the meantime, Georgian Railway and the European Bank for Reconstruction and Development (EBRD) have announced tender on drawing up a general plan for developing the Tbilisi center after the central railway station will move to the Tbilisi Sea areas and the detour railway project will be implemented.

Georgian Railway says the tender has been announced in line with the EBRD purchase regulations.

Under the plan, the detour railroad construction will start in late summer 2010 in the aftermath which the Tbilisi central part will be freed from railroad.

The freed territory comprises about 73 hectares and is considered to be a core of the new district of Tbilisi.

Georgian Railway says invitations have been forwarded to leading developers and urban companies to take part in the project.

Interested companies should submit a land plot development plan on the ground of the Georgian market research.

Interest expressions should be submitted until July 26, after which qualified applicants will be offered to make proposals within 45 days.

The project is an estimated 170 million EUR, of which 100 million GEL will be disbursed by EBRD and 70 million EUR- by Georgian Railway.