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Georgia Capital ramps up buybacks amid significant cash flow progress

17th May 2024 15:34

(Alliance News) - Georgia Capital PLC on Friday pledged a further around USD110 million of share buybacks by 2026 as it forecast an improved cash flow position.

Shares in the Tbilisi-based investor in domestic businesses in Georgia rose 4.3% to 1,000.00 pence in London on Friday.

Georgia Capital said it intended to make available at least GEL300 million, around USD110 million, for share buyback programmes through the end of 2026.

These programmes will be funded from expected cash inflows, it said.

As part of the plans, Georgia Capital said it would launch a GEL70 million, around USD25 million, share buyback immediately.

Georgia Capital said its gross debt balance has been reduced to USD150 million from USD365 million over the last two years, significantly improving its leverage profile.

It also highlighted "significant progress" has been achieved in free cash flow generation capabilities. Free cash flow has improved from negative USD10 million in 2020 to positive USD48 million in 2023, it noted.

Georgia Capital said it was confident in the company's expected future cash inflows through the end of 2026 and expects that free cash flow will be in excess of USD200 million during this period.

Shares in Bank of Georgia and fellow Georgian lender, TBC Bank Group PLC, have been under pressure after mass street protests followed the passing of a controversial "foreign agent" bill in Georgia’s parliament on Tuesday.

The new rules are set to require non-government organisations and independent media receiving more than 20% of their funding via foreign donors to register as "bearing the interests of a foreign power".

In the last 5 days, shares in TBC Bank have fallen 12% while Georgia Capital's share price has dropped by 14%.

By Jeremy Cutler, Alliance News reporter

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