BAKU, Azerbaijan, April 15
Tamilla Mammadova – Trend:
Georgian Silknet mobile operator incurred large 114 million lari ($33.2 million) capital expenditures in 2020, which is 30 percent of revenue, Trend reports via the investment company Galt & Taggart.
In addition, 2 million lari ($582,537) was spent on IT transformation, 5 million lari ($1.4 million) on Euronews operating license and acquisition of subscriber contracts from local operator for 5 million lari in 2020.
Silknet maintained strong cash balance in 2020, at 77.8 million lari ($22.6 million). This was achieved by extension of payment terms with major vendors, to ensure cash liquidity in turbulent times.
Notably, in 2019 Silknet acquired a 20,000 sq.m. land plot in the center of Tbilisi, for its headquarters. A total of $20 million was paid to a related party in two tranches in 2019 and 1Q2020.
Significant FX risk – most of the revenues are generated in lari, while 95 percent of Silknet’s debt is USD denominated (with 73 percent of total debt unhedged).
In November 2020, Silknet launched Georgian Depositary Notes, which are linked to $200 million Eurobonds. The issuance of the notes, with $1,000 denomination, is aimed to increase local demand on Eurobonds, by removing the barriers (minimum investment of $200,000), which makes purchase of Eurobonds unaffordable for many Georgians.
After the hike in Silknet Eurobond yield in March 2020, yields started to decline, in line with other Georgian Eurobonds and broad financial markets. By end of 2020, the yield dropped to 7.7 percent with the bond selling at a 109.2 percent premium to par.
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