The FINANCIAL — In October 2007, Bank of Georgia (LSE: BGEO, GSE: GEB), the leading Georgian universal bank, announced that it has successfully completed the acquisition of a 98.77% equity interest in Universal Bank of Development & Partnership (“UBDP”), a mid-sized bank in Ukraine. The completion of the transaction followed the approval of the National Bank of Ukraine as announced in August 2007, allowing Bank of Georgia to increase its stake up to 100% since the acquisition of a 9.92% equity interest in UBDP in January 2007.
The aggregate consideration paid for the 98.77% equity interest comprised of USD 81.7 million, which translates into a P/BV (2006A) of 2.15x, based on UBDP’s 2006 Audited IFRS financial results. Galt & Taggart Securities acted as Bank of Georgia’s sole financial advisor in connection with this transaction. As of 30 June 2007, UBDP held market shares of approximately 0.22% by total assets, 0.25% by gross loans, 0.21% by total deposits and 0.31% by shareholders’ equity, based on the National Bank of Ukraine data. UBDP, which is headquartered in Kiev, currently serves approximately 20,000 retail and 2,500 corporate clients through its 39 branches located in five oblasts of Ukraine, of which 14 operate in Kiev. UBDP is an associate member of VISA international. The bank has a network of 31 ATMs.
Bank of Georgia is a leading universal Georgian bank with operations in Georgia and Ukraine, is the largest bank by assets, loans, deposits and equity in Georgia, with a 34% market share by total assets (all data according to the NBG as of 31 August 2007). The major component of Galt & Taggart Index, the bank has 109 branches, over 595,000 retail and over 60,000 corporate current accounts as at 30 September 2007. The bank offers a full range of retail banking and corporate and investment banking services to its customers across Georgia. The bank also provides a wide range of corporate and retail insurance products through its wholly-owned subsidiary, Aldagi BCI, as well as asset & wealth management services.
Universal Bank of Development & Partnership is a mid-sized Ukrainian bank, with an approximately 0.2% market share in total assets, 0.3% in gross loans, 0.2% in client deposits and 0.3% in equity. As of 30 June 2007, the bank had USD 209 million in total assets. In 1H 2007 the bank earned a net income of USD 4 million. Bank of Georgia has, as of the date hereof, the following credit ratings: Standard & Poor’s ‘B+/B’ Stable Moody’s ‘B3/NP’ (FC) & Ba1/P-3 (LC) Stable Fitch Ratings ‘B+/B’ Stable.
In May, 2007 Ukraine’s PrivatBank entered the Georgian market after buying into 75% of shares of the small Georgian Tao Bank for USD 25 million.
Coca-Cola Bottlers Georgia LTD was a major stakeholder of Tao Bank, whose total assets reached GEL 26.3 million (USD 15.6 million) last year.
PrivatBank, with a net asset of up to USD 8 billion, has an ambition to become a leading bank in Georgia with a plan to establish up to 100 branches and 200 ATMs throughout Georgia by 2008, officials from PrivatBank said at a presentation in Tbilisi on May 15.
