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Georgian railway to lead to New York2010-10-27 13:13
Wall Street tycoons attracted by Georgian Railway turn their benignant gazes to Sakartvelo. New York Stock Exchange shows interest in the transport operator's bonds that took the Georgian Railway delegation on a one-week visit to the USA to discuss possible bond offering on the world's largest trading floor.
In July 2010 Georgian Railway placed European bonds due 2015 on London Stock Exchange (LSE). The volume of the offering amounted to USD 250 million. Par value is 1,000 and USD 100,000 with annual percentage rate 9,875%. International rating agencies - Standard&Poor's and Fitch - unanimously assigned B+ Rating and Stable Outlook to the securities.
Listing in Britain organized by overseas banks J.P. Morgan and Bank of America's Merrill Lynch can be viewed as successful. Investors from European countries purchased 87.2 per cent of the bonds. As Tbilisi reported in follow-up to the offering: 40.4% of the bond issue was bought by British investors, 20.9% - by Swiss investors and 25.9% - by other European financiers. Georgian citizens were left with 6.5% of the bonds, with 6.1% gone to the offshores and 0.2% to Asian countries.
The interest NY brokerage offices show to the Georgian carrier's bonds is understood particularly against the background of decent growth in 2010. From January to September GR transported 14.8 mln tons of cargo which is 21.3% more than a year before. Transit traffic has gone up by 22% now making 67.6% of the total volume of cargo transportation (ten million tons). Considerable rise in economic indexes naturally made the Georgian Railway more attractive.
Is there hope that Sakartvelo Railway will get mountains of gold thus becoming the only prospering industry in Georgia? Giya Khukhashvili, an economist, former member of the Georgian transport operator's supervisory board categorically challenges this interpretation.
"The railway has serious problems. GR is an extremely unattractive asset from business point of view. Probably, there is some political interest, but a free investor familiar with the situation inside the company is unlikely to invest his hard-earned money", - the expert believes.