TIDM45ET
RNS Number : 4412D
Georgian Railway LLC
16 May 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 May 2012
Georgian Railway IPO - Price Range Announced Today
The JSC Partnership Fund (the "Selling Shareholder") today
announces the price range for the 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 price range set at US$15.25 to US$19.00 per GDR, with
each GDR representing 20 Shares in Georgian Railway
-- Offering to comprise the sale of up to 262,437,800 Shares in
the form of 13,121,890 GDRs (1 GDR equals 20 shares), including
Shares subject to an overallotment option, representing up to 25%
of Georgian Railway's authorised share capital
-- Offering valued at least at US$200 million to US$250 million
on the basis of the price range, including Shares subject to the
overallotment option
-- Georgian Railway market capitalisation valued at
approximately US$800 million to US$1,000 million on the basis of
the price range
-- Intention to pay out 60% of 2012 IFRS consolidated net profit as dividends
-- Institutional bookbuilding and roadshow commence today and
are expected to close on or before 23 May 2012
-- Pricing and allocations are expected to be announced and
listing and conditional dealings in the GDRs on the London Stock
Exchange are expected to commence on 24 May 2012
Comment
Commenting on today's announcement, Irakli Ezugbaia, CEO of
Georgian Railway, said;
"Georgian Railway is uniquely positioned with its combination of
statutory monopoly and deregulated tariff-setting and its track
record of profitable growth. We look forward to meeting prospective
investors and sharing with them our plans to capture the
considerable further growth and development opportunities we see
for our business in the region."
The IPO will comprise the sale of up to 262,437,800 existing
Shares in the form of 13,121,890 GDRs (1 GDR equals 20 shares),
held by the JSC Partnership Fund 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.
The price range for the IPO has been set at US$15.25 to US$19.00
per GDR, with each GDR representing an interest in 20 Shares.
On the basis of the price range the Offering is valued at least
at US$200 million to US$250million, including Shares subject to the
overallotment option, and Georgian Railway's market capitalisation
is valued at approximately US$800 million to US$1,000 million.
Application will be 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.
Institutional bookbuilding commences today and is expected to
close on or before 23 May 2012. Pricing and allocations are
expected to be announced and listing and conditional dealings in
the GDRs on the London Stock Exchange are expected to commence on
24 May 2012, 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.
The Offering and Admission are 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 for the IPO.
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.
NOTES TO EDITORS
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 TRACECA
corridor, the shortest transit route from the Caspian Sea and
Central Asia to the Black Sea and the Mediterranean Basin, 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 283.2m), EBITDA
of GEL259.9m (USD 154.2m) and net income of GEL 174.4m (USD 103.4m)
for the year to 31 December 2011, representing year-on-year growth
of 18.0%, 33.4% and 71.8% respectively. Its EBITDA margin in the
same period was 54.4%.. The Company currently expects to maintain a
minimum dividend payout ratio of approximately 30 per cent of any
consolidated net profit (calculated in accordance with IFRS). For
2012, the Company intends (with the approval of its current
shareholders) to pay out 60% of any consolidated net profit
(calculated in accordance with IFRS). Thereafter, for the period
from 2013-2017, subject as provided below, the Company intends to
pay annual dividends at rates in excess of the minimum payout
ratio. The Company's ability to pay a dividend in any given year
will, however, depend on many factors, including the Company's
earnings, cash requirements and financial condition and
macroeconomic conditions, assessment of investment and growth
opportunities available to it and of the overall capital markets
environment at the time, as well as the Company's focus on
maintaining a strong credit rating and enhancing long-term
shareholder value. Whether the Company will pay dividends and the
timing and amount of such dividends payable for a given year must
be endorsed by the GMS on the recommendation of the Board of
Directors, such recommendation being subject to approval by the
Supervisory Board. In circumstances where the Supervisory Board
does not approve the recommendation of the Board of Directors, the
recommendations of both the Board of Directors and the Supervisory
Board shall be submitted for approval to the GMS.
In line with its strategy to consistently improve its
profitability, management is pursuing several projects to drive
further efficiencies and incremental revenue growth. These include:
the USD 420m "Modernisation Project", which according to the
Company's estimates may 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.
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 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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