3rd Feb 2022 11:13
(Alliance News) - Georgia Capital PLC said on Thursday subsidiary JSC Georgia Capital has completed the first stage of disposal of its controlling interest in waterworks company Georgia Global Utilities JSC.
The Tbilisi-based investor in businesses in Georgia said JSC Georgia Capital had received USD180 million from FCC Aqualia, a Spanish water management company, following the completion of the initial disposal of a 65% equity interest in GGU, which constituted an 85% economic interest.
JSC Georgia Capital still holds a 35% equity stake in GGU, which is a 20% economic interest, and a 100% economic interest in the renewable energy assets of the business.
The second stage of the transaction is a demerger, expected to occur in July or August of this year. It is conditional on receiving antitrust clearance, and GGU redeeming an existing Eurobond. Following this, JSC Georgia Capital will own 100% of GGU's renewable energy assets and a 20% interest in the company.
Georgia Capital has said the net proceeds of the sale will eventually be deployed in share buybacks investments in securities, increasing cash balances, further investments and lending to portfolio companies. In the short-term, proceeds will be held in cash and debt securities pending a board review.
USD95.4 million will go towards refinancing GGU's outstanding green bond, and will go towards payment in respect of the renewable energy business.
"We look forward to working closely with Aqualia as their minority partner in GGU over the next few years. Completion of this disposal represents a key strategic milestone that realises material cash proceeds for JSC Georgia Capital, at a substantial premium to GGU's latest independent investment value," said Georgia Capital Chair and Chief Executive Officer Irakli Gilauri.
Georgia Capital's share price was up 1.2% to 683.00 pence each in London on Thursday morning.
By Elizabeth Winter; [email protected]
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