Georgian Railway will auction up to 25 percent of the shares on IPO
Georgia, Tbilisi, April 16 /Trend N.Kirtzkhalia/
Georgian Railway, plans to sell up to 25 percent of its shares on the London Stock Exchange through an IPO (Initial Public Offering) in May.
The placement of shares on the London Stock Exchange will be in the form of global depositary receipts (GDR), the Ministry of Economy of Georgia said in a statement on Monday.
More than 95 percent of Georgian Railways revenues in the amount of $285.8 million accounted for freight transportation in 2011. The company's profit before income tax expenses, accrued interest and amortization (EBITDA) in 2011 amounted to $155.6 million, and the margin of profitability (EBITDA margin) - 54,4 percent, which is "one of the highest rates in the railway industry on a global scale," a statement said.
Georgian Railways issued eurobonds worth $250 million for five years in June 2010.
The government planned to place the state owned shares of state companies on the London Stock Exchange, but had to temporarily abandon those plans due to the unstable situation on international markets. Prime Minister Nika Gilauri announced that the Government will return to these intentions on April 12, and added that the implementation of this plan will begin in the near future.
Citigroup and Goldman Sachs International are chosen as managers of Georgian Railway on the implementation of the IPO shares.
"We are already in the list of railway companies in the world who work for profit and do not depend on government subsidies" General Director of the Georgian Railways Irakli Ezugbaya said. "IPO shares of our company will be a new stage in the development of Georgian Railways, which will represent our company the best way and will contribute to our long-term plans in terms of increasing activity in the region."