Georgian Railway postpones $1bn IPO

By bne IntelliNews May 25, 2012

bne -

The Georgian government has again postponed its planned IPO of Georgian Railway on the London Stock Exchange due to unstable market conditions.

Prime Minister Nika Gilauri said the listing of up to a 25% stake in global depositary receipts, which was due to take place on May 24, had been put off due to the unstable global markets, following consultations with bankers and investors. The listing will take place when with the situation is more stable. "Unfortunately, the international market has worsened, so that they do not advise to do this yet, and accordingly we rescheduled the process," Gilauri said in a statement.

Tbilisi decided to go ahead with the listing of the state-owned railway monopoly earlier this year as the economic climate appeared to have improved. However, growing problems within the Eurozone, in particular in Greece and Spain, have changed the situation for the worse.

This follows the decision to cancel several offerings on international markets in 2011, which were also put on hold because of poor market conditions.

The Georgian Railway IPO had been hotly anticipated, and at a price range at $15.25 to $19 was expected to give the company a valuation of up to $1bn.

The company is the sole company operating all railway activities in Georgia, operating on a similar model to regional US rail companies. By contrast, in most European countries separate companies have been set up to handle areas such as network maintenance, freight and passenger transport. The rail company is also a key part of the rail transit route for the Caspian oil-producing countries of Azerbaijan and Kazakhstan to deliver their oil to European markets.

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