TIDM45ET
RNS Number : 3364B
JSC Georgian Railway
16 April 2012
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY,
IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA,
CANADA OR
JAPAN
This announcement is an advertisement and not a prospectus for
the purposes of Directive 2003/71/EC (together with any applicable
implementing measures in the relevant home member state under such
Directive) (the "Prospectus Directive"), and investors should not
subscribe for or purchase any GDRs referred to in this announcement
except on the basis of information in the prospectus (the
"Prospectus") to be published by JSC Georgian Railway in due course
in connection with the Offering (as defined below) and Admission
(as defined below).
FOR IMMEDIATE RELEASE 16 April 2012
The Ministry of Economy and Sustainable Development of Georgia,
on behalf of the State of Georgia, announces its intention to
proceed with an Initial Public Offering of Shares in JSC Georgian
Railway in the form of Global Depositary Receipts to be listed on
the London Stock Exchange
The Ministry of Economy and Sustainable Development of Georgia,
on behalf of the State of Georgia (the "Selling Shareholder"),
today announces its intention to proceed with an Initial Public
Offering (the "Offering" or "IPO") of Shares in JSC Georgian
Railway ("Georgian Railway" or the "Company"), Georgia's integrated
and statutory railway monopoly, in the form of Global Depositary
Receipts ("GDRs") to be listed on the London Stock Exchange.
Highlights
-- IPO to comprise the sale of up to 25% of Georgian Railway's
share capital held by the Selling Shareholder as part of its
privatisation programme
-- GDRs expected to be listed on the London Stock Exchange in
May 2012, subject to market conditions
-- Unique combination of statutory rail monopoly and de-regulated tariff setting
-- Strategic position forming a key part of the TRACECA
Corridor, the shortest transit route from Central Asia to
Europe
-- Over 95% of USD 285.8m revenues in 2011 generated by freight
operations for cargo owners comprising well known and established
companies
-- Positioned to benefit from strong regional GDP growth,
transportation of growing regional oil production volumes,
increasing containerisation and geographic expansion of its network
into new transit routes
-- Restructured, integrated railway with a strong financial
track record - 2011 year-on-year revenue growth of 18%, EBITDA
growth of 33% and net income growth of 72%
-- 54.4% EBITDA margin in 2011, among the highest in the global rail industry
-- Expected dividend payout policy of at least 30% of annual
consolidated net income from 2012
Georgian Railway
Georgian Railway is Georgia's integrated and statutory railway
monopoly. It principally provides freight services and sets its own
tariffs without regulation. Forming a key part of the Caucasus
corridor, the shortest transit route from the Caspian Sea and
Central Asia to the Black Sea and Europe, the Company is well
positioned to capitalise on strong regional GDP growth, increasing
trade volumes and increasing demand for transportation of the
region's growing oil production volumes.
The Company generated revenues of GEL477.4m (USD 285.8m), EBITDA
of GEL259.9m (USD 155.6m) and net income of GEL 174.4m (USD 104.4m)
for the year to 31 December 2011, representing year-on-year growth
of 18.0%, 33.4% and 71.8% respectively. Its 54.4% EBITDA margin in
the same period is among the highest in the global rail industry
and the Company expects to pay out at least 30% of annual
consolidated net income in dividends from 2012.
In line with its strategy to deliver profitability levels above
the industry average, management is pursuing several projects to
drive further efficiencies and incremental revenue growth. These
include: the USD 420m "Modernisation Project", expected to deliver
annual savings in operating costs of up to 40% compared with
2008-10 total operating costs in the areas affected by the
Modernisation Project upon its completion by 2016; the development
of its containerisation operations, increasing the proportion of
higher value dry cargo transit in its revenue mix; and network
expansion into new transit routes including the Baku-Tbilisi-Kars
project, a new, rail-only corridor from the Caspian Sea to Europe
via Turkey without the need for sea transportation.
The IPO
The IPO will comprise existing shares held by the State of
Georgia, Georgian Railway's major Shareholder, acting through the
Ministry of Economy and Sustainable Development of Georgia,
representing (including shares subject to an overallotment option)
up to 25% of Georgian Railway's authorised share capital. The
Shares will be offered in the form of GDRs to institutional
investors outside the United States in reliance on Regulation S and
to certain qualified institutional buyers in the United States
under Rule 144A.
Application has been made to the UK Listing Authority and the
London Stock Exchange, respectively, for the GDRs to be admitted to
the standard segment of the Official List of the UK Listing
Authority (the "Admission") and to trading on the London Stock
Exchange's regulated market for listed securities. Following the
IPO, there will be a lock-up period of 180 days for the Company and
existing shareholders.
The Offering is part of the privatisation programme of the State
of Georgia, in accordance with its established policies of economic
liberalisation and deregulation. The Offering and listing is
expected to enhance the Company's international capital markets
profile and access, providing strategic flexibility to support its
long term growth and development.
Citigroup and Goldman Sachs International have been appointed as
Joint Global Coordinators and Joint Bookrunners.
The offering is subject to receipt of all necessary regulatory
approvals, including the relevant registrations and approvals by
the UK Financial Services Authority, and to favourable market
conditions.
Comment
Commenting on today's announcement, Irakli Ezugbaia, CEO of
Georgian Railway, said;
"We are already one of the very few railway companies in the
world delivering profitable growth without reliance on government
subsidy. Our IPO will now mark another stage in Georgian Railway's
evolution, bringing greater profile and visibility to the value we
are creating to support our long term expansion plans in the
region. As a unique combination of a statutory monopoly with
deregulated tariff-setting located at the junction of one of the
emerging world's most important transport corridors, I believe we
have a new rail industry story to tell to investors seeking quality
exposure to the Caucasus and Central Asian regional growth."
Ends
Enquiries
Citigate Dewe Rogerson +44 (0)20 7638 9571
Andrew Hey
David Westover
Marina Zakharova
Justin Griffiths
This announcement and the information contained herein is not an
offer of securities for sale in the United States. Securities may
not be offered or sold in the United States absent registration or
an exemption from registration. No public offering of the
securities will be made in the United States.
In any member state of the European Economic Area that has
implemented the Prospectus Directive this communication is only
addressed to and directed at persons who are "qualified investors"
within the meaning of Article 2(1)(e) of the Prospectus Directive
("Qualified Investors").
In addition, in the United Kingdom, this document is being
distributed only to, and is directed only at, (i) Qualified
Investors who are investment professionals falling within Article
19(5) of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005 (the "Order") or (ii) high net worth
companies and other persons to whom it may lawfully be
communicated, falling within Article 49(2)(a) to (d) of the Order
(all such persons in (i) and (ii) above together being referred to
as "relevant persons"). Any invitation, offer or agreement to
subscribe, purchase or otherwise acquire any securities will be
engaged in only with relevant persons. Any person who is not a
relevant person should not act or rely on this document or any of
its contents. Persons distributing this document must satisfy
themselves that it is lawful to do so.
The Securities mentioned herein have not been, and will not be,
registered under the United States Securities Act of 1933 (the
"Securities Act") and may not be offered or sold within the United
States except pursuant to an exemption from, or in transaction not
subject to, the registration requirements of the Securities
Act.
Any purchase of GDRs in the Offering should be made solely on
the basis of the information contained in the Prospectus and the
pricing statement in connection with the Offering. Copies of the
Prospectus will, following publication, be available from the
Company's registered office at 15 Tamar Mepe Avenue, Tbilisi 0112,
Georgia. No reliance may or should be placed by any person for any
purposes whatsoever on the information contained in this
announcement or on its completeness, accuracy or fairness. The
information in this announcement is subject to change.
The timetable of the Offering, including the date of Admission,
may be influenced by a range of circumstances such as market
conditions. There is no guarantee that Admission will occur, and
you should not base your financial decisions on the Company's
intentions in relation to Admission at this stage. Acquiring GDRs
to which this announcement relates may expose an investor to a
significant risk of losing all of the amount invested. Persons
considering making such an investment should consult an authorised
person specialising in advising on such investments. This
announcement does not constitute a recommendation concerning the
Offering. The value of GDRs can decrease as well as increase.
Potential investors should consult a professional adviser as to the
suitability of the Offering for the person concerned.
Citigroup Global Markets Limited and Goldman Sachs
International, each of which are authorised and regulated in the
United Kingdom by the FSA, are acting exclusively for the Company
and the Selling Shareholder and no-one else in connection with the
Offering. They will not regard any other person as their respective
clients in relation to the Offering and will not be responsible to
anyone other than the Company and the Selling Shareholder for
providing the protections afforded to their respective clients, nor
for providing advice in relation to the Offering, the contents of
this announcement or any transaction, arrangement or other matter
referred to herein.
This announcement may include statements that are, or may be
deemed to be, "forward-looking statements". These forward-looking
statements may be identified by the use of forward-looking
terminology, including the terms "believes", "estimates", "plans",
"projects", "anticipates", "expects", "intends", "may", "will" or
"should" or, in each case, their negative or other variations or
comparable terminology, or by discussions of strategy, plans,
objectives, goals, future events or intentions. Forward-looking
statements may and often do differ materially from actual results.
Any forward-looking statements reflect the Company's current view
with respect to future events and are subject to risks relating to
future events and other risks, uncertainties and assumptions
relating to the Company's business, results of operations,
financial position, liquidity, prospects, growth and strategies.
Forward-looking statements speak only as of the date they are
made.
Each of Citigroup Global Markets Limited, Goldman Sachs
International, the Company and the Selling Shareholder and their
respective affiliates expressly disclaims any obligation or
undertaking to update, review or revise any forward-looking
statement contained in this announcement whether as a result of new
information, future developments or otherwise.
In connection with the Offering, Citigroup Global Markets
Limited and Goldman Sachs International and any of their respective
affiliates, acting as investors for their own accounts, may
subscribe for or purchase GDRs and in that capacity may retain,
purchase, sell, offer to sell or otherwise deal for their own
accounts in such GDRs and other securities of the Company or
related investments in connection with the Offering or otherwise.
Accordingly, references in the Prospectus, once published, to the
GDRs being issued, offered, subscribed, acquired, placed or
otherwise dealt in should be read as including any issue or offer
to, or subscription, acquisition, placing or dealing by Citigroup
Global Markets Limited and Goldman Sachs International and any of
their affiliates acting as investors for their own accounts.
Citigroup Global Markets Limited and Goldman Sachs International do
not intend to disclose the extent of any such investment or
transactions otherwise than in accordance with any legal or
regulatory obligations to do so.
None of Citigroup Global Markets Limited and Goldman Sachs
International or any of their respective directors, officers,
employees, advisers or agents accepts any responsibility or
liability whatsoever for, or makes any representation or warranty,
express or implied, as to the truth, accuracy or completeness of,
the information in this announcement (or whether any information
has been omitted from the announcement) or any other information
relating to the Company, its subsidiaries or associated companies,
whether written, oral or in a visual or electronic form, and
howsoever transmitted or made available or for any loss howsoever
arising from any use of the announcement or its contents or
otherwise arising in connection therewith.
In connection with the Offering, Citigroup or Goldman Sachs
International will act as stabilising manager (the "Stabilising
Manager"). The Stabilising Manager, or any of the agents, may (but
will be under no obligation to), to the extent permitted by
applicable law, over-allot GDRs or effect other transactions with a
view to supporting the market price of the GDRs at a higher level
than that which might otherwise prevail in the open market. The
Stabilising Manager is not required to enter into such
transactions, and such transactions may be effected on any stock
market, over-the-counter market, stock exchange or otherwise and
may be undertaken at any time during the period commencing on the
date of the commencement of conditional dealings of the GDRs on the
London Stock Exchange and ending no later than 30 calendar days
thereafter. However, there will be no obligation on the Stabilising
Manager or any of its agents to effect stabilising transactions,
and there is no assurance that stabilising transactions will be
undertaken. Such stabilising measures, if commenced, may be
discontinued at any time without prior notice. In no event will
measures be taken to stabilise the market price of the GDRs above
the offer price. Save as required by law or regulation, neither the
Stabilising Manager nor any of its agents intends to disclose the
extent of any over-allotments made and/or stabilisation
transactions conducted in relation to the Offering.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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