TIDMCGEO
RNS Number : 7607K
Georgia Capital PLC
09 May 2022
London, 9 May 2022
Georgia Capital hosts Investor Day in London
Georgia Capital PLC (the "Group" or "Georgia Capital") is today
hosting an Investor Day for analysts and investors. As part of the
investor presentations, the Group will update investors and
analysts on its strategic goals and priorities as summarised
below.
Progress on strategic priorities announced in November 2020
The Group has made strong progress on the strategic priorities
announced at its last Investor Day in November 2020.
-- In December 2021, the Group announced the sale of an 80%
equity interest in its water utility business to FCC Aqualia for a
cash consideration of US$ 180 million.
-- The Group has successfully completed the sale of selected
commercial real estate assets for US$ 45 million with an 11.3%
premium to book value as of 31 March 2021
In addition, the Group commenced a US$ 10 million share buyback
and cancellation programme in August 2021, which was subsequently
increased by a further US$ 10 million in the first quarter of 2022;
Georgia Healthcare Group signed an SPA to acquire the remaining 33%
minority interest in its retail (pharmacy) business, at a 5.25x
EV/EBITDA multiple; the Education business has continued to expand
via several investment projects in the affordable segment; and. In
March 2021 JSC Georgia Capital priced a US$ 65 million Eurobond Tap
Issue.
Enhanced strategy for 2022 onwards
The Group has introduced an updated strategy, where Georgia
Capital will focus on: Investing in capital-light opportunities
only; adapting its capital management framework; and, putting ESG
at the core of its strategy.
Implementing the Capital-Light Investment Strategy
Georgia Capital will continue to invest in Georgia in sectors
not requiring intensive capital commitments. Georgia Capital will
also enable its large and capital-light portfolio companies to
explore regional growth opportunities, such as the recent expansion
of the Retail (Pharmacy) business into Armenia. In capital heavy
industries, Georgia Capital will seek to manage third-party money
and/or establish partnerships going forward.
The Group's capital commitments to its existing portfolio
companies are US$ c30 million in the Renewable Energy business, and
US$ c24 million in the Education business.
In addition, the minimum potential exit threshold required for
business investment is being reduced from GEL 500+ million, to GEL
300+ million. Since our last Investor Day in 2020, we have received
significant incoming interest from various international strategic
and financial buyers, and our experience has demonstrated that
businesses with a GEL 300+ million equity value in Georgia are very
attractive to potential investors.
Updating our capital management framework
Deleveraging the Group's balance sheet, at a time of significant
potential economic and regional instabilities, is a key priority to
safeguard our portfolio, and enable the Group to take advantage of
attractive investment opportunities that may arise as a result of
those instabilities. In addition, all of the Group's private
portfolio companies will have individual leverage targets.
The Group has recently significantly reduced its leverage and
net capital commitment (NCC) profile. NCC represents the aggregated
total of all confirmed, agreed and potential capital outflows at
the Georgia Capital level. At 31 March 2022, the Group's NCC as a
percentage of the Total Portfolio Value (NCC Ratio) stood at 28%,
compared to a recent year peak of 57% at 30 June 2020. The Group
has introduced an NCC Ratio Navigation Tool, which will drive the
Group's share buyback and investment policy; An NCC Ratio between
15-40% will lead to tactical share buybacks/investments, whilst an
NCC ratio below 15% is expected to generate more meaningful share
buybacks/investments.
Over US$ 50 million has been returned to shareholders over the
last 4 years, since Georgia Capital's initial listing in 2018. More
recently 2.1 million shares (c4% of issued share capital), with a
total value of US$ 17.3 million have been repurchased since 10
August 2021. The Group has today announced an additional US$ 10
million to repurchase shares - US$ 5 million will be allocated to
the ongoing share buyback and cancellation programme, and US$ 5
million will be allocated to purchase shares for the management
trust.
Putting ESG principles at the core of our strategy
Environmental, Social and Governance principles lie at the heart
of our business. Our portfolio is concentrated across structurally
important industries in Georgia, connecting Georgia Capital to the
country's sustainable development, through our significant
investments in positive impact businesses.
-- Our businesses owned through Georgia Healthcare Group
contribute significantly to the development of the Georgian
healthcare system
-- Our Education business makes a significant contribution to
Georgia's education system and the development of the country's
younger generation
-- Through a number of green projects, our renewable energy
business supports climate change mitigation, natural resources
conservation, and pollution prevention
-- Our Auto Service business is directly engaged in the reduction of greenhouse gas emissions
In addition, the Group has aligned our ESG disclosures with TCFD
recommendations; Georgia Capital has become a signatory of the UN
Global Compact; the Board, in February 2022, adopted a Responsible
Investment Policy; and, the Group has recently published its first
separate Sustainability Report. Looking forward, we will continue
to enhance our ESG monitoring and reporting framework, in line with
internationally accepted standards, and will continue to ensure the
incorporation of relevant ESG practices and measurable ESG targets
into our portfolio company operations.
The Group has also today separately announced an important
Governance update - the separation of the Chairman and CEO roles,
with effect from May 2023. Irakli Gilauri will remain Chairman of
the Board, and continues to hold a significant equity stake in
Georgia Capital. Nikoloz (Nick) Gamkrelidze will become the CEO of
Georgia Capital. The one-year transition period will enable a
smooth handover of executive management at both Georgia Capital and
Georgia Healthcare. The separate announcement is available at
www.georgiacapital.ge .
A full set of the presentation slides, which include a series of
business presentations focused on the significant growth
opportunities available over the next few years, will be available
on the Georgia Capital website at www.georgiacapital.ge .
Name of authorised official of issuer responsible for making
notification: Giorgi Alpaidze, Chief Financial Officer
About Georgia Capital PLC
Georgia Capital is a platform for buying, building and
developing businesses in Georgia with holdings in sectors that are
expected to benefit from the continued growth and further
diversification of the Georgian economy. The Group's focus is
typically on larger-scale investment opportunities in Georgia,
which have the potential to reach at least GEL 0.5 billion equity
value over 3-5 years from the initial investment and to monetise
them through exits, as investments mature. Georgia Capital
currently has the following portfolio businesses: (i) a healthcare
services business; (ii) a retail (pharmacy) business, (iii) an
insurance business (P&C and medical insurance); (iv) a
renewable energy business (hydro and wind assets) and (v) an
education business; Georgia Capital also holds other small private
businesses across different industries in Georgia; a 20% equity
stake in the water utility business and a 19.9% equity stake in LSE
premium-listed Bank of Georgia Group PLC ("BoG"), a leading
universal bank in Georgia.
JSC Georgia Capital has, as of
the date hereof, the following
credit ratings:
S&P Global 'B+'/FC & 'B+'/LC
Moody's B2/CFR & B2/PDR
For further information, please visit www.georgiacapital.ge or
contact:
Irakli Gilauri Giorgi Alpaidze Michael Oliver Shalva Bukia
Chairman and Chief Executive Chief Financial Officer Adviser to the Chairman & CEO Head of Investor Relations
ir@gcap.ge +995 322 005 000 +44 203 178 4034 + 995 322 005 045
ir@gcap.ge ir@gcap.ge ir@gcap.ge
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only and should not be construed as an offer to sell or the
solicitation of an offer to buy any securities
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