EBRD has allocated Euro217 million to the Georgian Oil and Gas Corporation

By Natalia Kochiashvili

Thursday, September 24

The loan proceeds will exclusively refinance an existing Eurobond, issued in 2016 on the London Stock Exchange.

The Bank is mobilising participation from several URP providers.

Georgian Oil and Gas Corporation (GOGC), a major Georgian electricity and natural gas supplier, will receive Euro217 million from the European Bank for Reconstruction and Development (EBRD), which was allocated for refinancing Eurobonds, the corporation said.

The loan agreement envisages full refinancing of $ 250 million worth of Eurobonds listed on the London Stock Exchange by the GOGC. Existing Eurobonds were placed by the corporation in 2016 for 5 years and according to the schedule, it was to be fully repaid in April 2021.

Since the beginning of the year, the GOGC, in cooperation with major investment banks, has been actively organizing and managing the 2016 Eurobond refinancing process. Relevant information prospectus for potential investors has been prepared. Due to the spread of COVID 19 and its negative impact on the financial markets, which made the transaction impossible on acceptable terms, the corporation, in agreement with investment banks, refused to redeem the 2016 Eurobonds on the London Stock Exchange in April 2020 by issuing new Eurobonds.

As a result of active work with the EBRD, the Oil and Gas Corporation signed a 10-year loan agreement in September this year, which will allow it to repay the loan obligation on favorable terms under the 2016 Eurobonds.

According to Giorgi Bakhtadze, General Director of the GOGC, the loan agreement will ensure the long-term financial stability of the corporation and also significantly reduce its financial costs.

“The terms of the loan received are much better than we would have had before the pandemic refinancing process. The interest rate is twice as low. Also, the loan term is 10 years, while Eurobonds would be 5 years. Thus, despite the global difficulties caused by COVID 19, the GOGC has successfully coped with the process of securing refinancing of Eurobonds, which will help us to implement the planned projects more effectively,” said Bakhtadze.