EBRD sells its Bank of Georgia shares

The European Bank for Reconstructions and Development (EBRD) has sold its five percent stake in Bank of Georgia Holdings Plc, the country’s largest bank.

The bank confirmed the sale and said the move reflected "strong institutional investor demand and increasing investor focus on Georgia”.

The 1,795,503 shares, representing the EBRD’s entire holding in Bank of Georgia, were sold in an Accelerated Bookbuild Offering, which launched after the stock market closed in London on September 23, 2014.

#EBRD role in helping @bankofgeorgia is complete! Well done for listing @LSEplc! http://t.co/vjDAU7srvl#Georgiapic.twitter.com/sNPaEv4PlH

— The EBRD (@EBRD) September 24, 2014

The transaction was successfully completed at a small discount to yesterday’s closing price of £24.98 on the London Stock Exchange. The shares were placed with a broad range of international institutional investors through RBC Capital Markets and UBS Limited as joint bookrunners.

Bank of Georgia’s CEO Irakli Gilauri said he appreciated the support the bank had received from the EBRD over the past 19 years, as the Bank of Georgia transformed itself into a dynamic financial institution spanning a range of product areas.

"We are especially gratified that existing investors have increased their stakes and that we are also attracting new institutional shareholders. This transaction illustrates the depth of support for the bank from international investors and signals increasing investor interest in Georgia’s capital market. We are looking forward to continuing our strong relationship with the EBRD on a number of other longer term funding projects,” he said.

The EBRD’s relationship with Bank of Georgia dates back to 1995. Since that time, the EBRD has provided Bank of Georgia with a range of products, including SME and energy efficiency credit lines, co-financing facilities as well as subordinated and convertible loans.

EBRD managing director Nick Tesseyman believed the EBRD’s role in supporting Bank of Georgia in the aftermath of the 2008 crisis was now complete.

"The premium listing on the LSE was a landmark moment for the bank and the EBRD is confident that it is now well-placed to continue its dynamic development in the future. The EBRD will continue to provide debt financing to Bank of Georgia going forward as part of our continued support to the Georgian financial sector,” Tesseyman said.

The EBRD had held its Bank of Georgia shares since early 2012, following a conversion of a financial package provided in December 2008 as part of its response to the effects of the global financial crisis. This financing helped rebuild confidence in the Georgian financial market and supported Bank of Georgia’s successful growth strategy and subsequent premium listing on the London Stock Exchange.