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BoG eyes purchase Privat Bank Georgia, stakes in water utility firm

Monday, December 8
Bank of Georgia (BoG), the country’s largest bank, announced about its plans to buy Ukrainian PrivatBank’s Georgian subsidiary, as well as minority stakes in Georgian Global Utilities Limited, which owns water and wastewater service providers in Tbilisi, Rustavi and Mtskheta.

BoG, which took a premium listing on the London Stock Exchange in 2012, has placed new ordinary shares to raise funds for planned expansion, which will also include potential additional acquisitions for its healthcare subsidiary.

Bank of Georgia Holdings PLC, a UK-incorporated holding company of BoG, said on December 5 that it raised about USD 114 million as a result of placing 3.59 million new ordinary shares with existing and new institutional investors, representing up to 10% of its current issued share capital.

BoG said it has made a preliminary deal with Ukraine’s largest bank PrivatBank to buy the latter’s Georgian subsidiary for about USD 51 million.

With buying PrivatBank Georgia, BOG said it hopes to boost its highly profitable retail business.

PrivatBank Georgia is the ninth largest bank in Georgia by total assets with a focus on retail banking.

BoG has also made a preliminary deal with Georgian Global Utilities Limited on acquisition of the latter’s 25% shares for about USD 26.25 million with the possibility to further increase its stakes to 49.9% for an additional USD 26 million within ten months.

Offshore registered Georgian Global Utilities Limited (GGU) supplies water and provides wastewater service in the capital city Tbilisi through its wholly owned company Georgian Water and Power.

GGU also provides similar services in Rustavi and Mtskheta, towns near Tbilisi, and in additional owns three hydropower generation facilities with a total capacity of 143MW.

Part of the proceeds from placing shares, according to the bank, will be used for hospital acquisitions for its non-core, healthcare business to support planned initial public offering of its healthcare subsidiary in 2015.

Evex Medical Corporation, BoG’s healthcare subsidiary, operates 38 clinics with 2,140 beds in Georgia.