PM Speaks of Shipping Company Privatization

Georgian Prime Minister Zurab Zhvania said on January 31 that the Georgian Ocean Shipping Company was purchased by Armstrong Holding for USD 161 million. This statement is a reversal of the Georgian government?s earlier announcement that the Shipping Company was privatized by a British-Austrian consortium led by ASP Ship Management Company.

?It was my mistake, when I announced the British-Australian consortium as the winner [of the privatization of the Shipping Company]. These companies have not set up a consortium. The new owner of the Georgian Ocean Shipping Company has become Armstrong Holdings Corporation, which was founded in 2004; while ASP Ship Management will simply conduct the management of purchased ships,? the Prime Minister said on January 31 at a news conference organized by the Tbilisi-based Imedi radio station.

Detailed information about the newly established Armstrong Holding company is not available.

?It is a wide-spread practice, when there is a company, which owns ships and other company conducts the management,? he added.

He also said that ASP Ship Management was among those companies, which made privatization bids. ?However, after the price went up the company gave up plans to participate in the privatization,? Zurab Zhvania said.

Initially the Georgian government reported that seven companies were bidding for the Shipping Company. However, Armstrong Holding was not among them.

The Georgian Prime Minister explained this with the fact that Armstrong Holding made its bid on January 10 ? just one day before the deadline for making bids expired.

According to the deal, Armstrong Holding will have to pay USD 161 million, out of which USD 89 million will go to the state budget and USD 72 millions to covering the debts of the Georgian Ocean Shipping Company.