Georgia will receive “hundreds of millions of additional investments” from planned initial public offering of minority stake of state enterprises, PM Nika Gilauri said on September 14.
Parliament approved on September 13 with its first reading a draft of legislative amendment allowing the government to float stake of state enterprises on international stock markets. The proposal has been criticized by opposition expressing fear that the move might lead to losing state control over strategic assets.
“The Georgian government neither now nor in the future plans to sell controlling stake of these enterprises,” PM Gilauri said at a government session on September 14.
“Our goal is to float minority stake – 20, 25, 30% - of these strategic enterprises on the international stock markets; no more than 49% of stake of these companies will be floated.”
The move, he said, would attract “hundreds of millions of additional investments.”
“If implemented in next few months it will bring more than USD 500 million,” PM Gilauri said.
Among the state enterprises, which the government plans to target for IPO, are the Georgian Railway and Georgian State Electric System, which is in charge of power transmission throughout the country, as well as Georgian Oil and Gas Corporation (GOGC), which operates the North-South Gas Pipeline, transporting gas from Russia to Armenia via Georgia.
The government also said in February that it was considering IPO of its minority stakes in electricity distribution company in Tbilisi. 75% of Telasi, the electricity distributor in the capital city, is owned by the Netherlands-registered Silk Road Holdings B.V., which is wholly owned by Russia’s state-controlled power trader, Inter RAO; 24.53% of Telasi stakes is owned by the Georgian state.