Georgia Capital PLC Edison issues update on Georgia Capital (CGEO)
28 November 2022 - 06:15PM
RNS Non-Regulatory
TIDMCGEO
Georgia Capital PLC
28 November 2022
London, UK, 28 November 2022
Edison issues update on Georgia Capital (CGEO)
Georgia Capital's (GCAP's) NAV per share in Georgian lari (GEL)
total return terms was 8.2% in Q322. At the same time, further GEL
strength against sterling (driven by the strong local economy)
resulted in a 25.5% NAV/share increase in sterling terms. The main
driver of GCAP's NAV increase was the strong performance of Bank of
Georgia shares (21% of GCAP's portfolio at end-September), which
rallied by 52% during the quarter in sterling terms. GCAP's 'live'
NAV estimate currently stands at GBP18.87, with its share price
implying a 60% discount to NAV, significantly wider than the
average across listed private equity companies.
The Georgian economy exhibits extremely strong momentum (see
details below), which has been recognised by international
institutions, with the IMF increasing its 2022 GDP growth estimate
to 9.0%. GCAP portfolio companies are well-positioned to benefit
from the booming economy, as they hold market-leading positions in
the Georgian economy (eg 35% of national pharmacies' revenue, a 26%
P&C insurance market share) and have good access to capital
despite the tightening credit conditions globally (the recent bond
issue of GCAP's renewable energy business was the largest corporate
bond placed on a Georgian exchange to date). In the current
environment, GCAP focuses on deleveraging, with its net capital
commitment (NCC) ratio down to 22.2% at end-September from 31.9% at
end-2021, on the back of the increase in the portfolio valuation,
supported by the US$29m Eurobonds buyback through a modified Dutch
auction. Management plans to bring the NCC ratio down further to
15% in the medium term.
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