Georgian Railways not on sale

Georgian government delayed initial public offering of up to 25% of shares of the state-owned railway monopoly on the London Stock Exchange (LSE).

“The Government of Georgia has decided to postpone the IPO of JSC Georgian Railway at this time due to the current challenging capital market conditions,” a brief statement distributed on May 24, reads.

A week before the Georgian Railway set a price range of $15.25-$19.00 USD per global depositary receipt for the listing, valuing it at $800 million to $1 billion. Books are expected to close on may 23, with a market debut scheduled for May 24. The company has already held three days of investor meetings, attended by Prime Minister Nika Gilauri.

Economic analyst Lado Papava commenting about government’s initiative of OPI said that the decision to sell Georgian Railway assets on the London Stock Exchange now inappropriate, due to threats from Russia.

"My advice to the government is not to take this step. We should remember that two years ago Russia bought an Armenian Railway package [and] renamed it the South Caucasian Railway. This means that Russia has ambitions to control not only Armenian railways, [but] the complete Caucasus," he said. Calling Russia "an enemy that does not hide its purposes," Papava believes the railway is too strategically important and the government should refrain from privatization.