Georgian Railway Sets Price Range Ahead of LSE IPO

The state-owned Georgian Railway expects to raise between USD 200 million and USD 250 million as a result of initial public offering (IPO) of up to 25% of shares on the London Stock Exchange (LSE) planned for May 24, the wholly state-owned JSC Partnership Fund, which is a selling shareholder, announced on May 16.

It said that the price range for the issue was set between USD 15.25 and USD 19 per global depositary receipts (GDR), with each GDR representing 20 shares.

On the basis of this price range, the Georgian Railway’s market capitalisation would value about USD 800 million to USD 1 billion.

The Georgian Railway, which in April was transformed from limited liability company to joint stock company, is set to become the world’s first publicly-quoted state-controlled railway monopoly.

Over 95% of the Georgian Railway’s USD 285.8 million revenue in 2011 was generated by freight operations.

The Georgian Railway, which sets its own tariffs without regulation, reported USD 155.6 million in earnings before interest, tax, depreciation and amortization (EBITDA) in 2011 and its 54.4% EBITDA margin was “among the highest in the global rail industry.”

Citigroup and Goldman Sachs International are joint global coordinators and joint bookrunners for the IPO.

"Georgian Railway is uniquely positioned with its combination of statutory monopoly and deregulated tariff-setting and its track record of profitable growth,” Irakli Ezugbaia, CEO of Georgian Railway, said in a statement. “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."