| Liberty Might Buy Another Georgian Bank, People’s Bank CEO |
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26/10/2009 11:56 (839 Day 02:52 minutes ago) | |||||
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The FINANCIAL -- Lado Gurgenidze, former Georgian prime minister, plans to buy several banks in emerging markets through his new company, Liberty Investments, before eventually taking it public, BusinessNewEurope reports.
Liberty might buy another Georgian bank, Gurgenidze says, adding that the sector is still under penetrated and that the Georgian government's so-called "Liberty Act," which Saakashvili presented to Parliament on October 6, would give investors a guarantee that current liberal economic policies won't change.
Liberty, established in September by Gurgenidze and Romanian billionaire Dinu Patriciu, has already bought People's Bank of Georgia , and future targets will be financial services companies in regions with similar economic conditions to Georgia, which could include Eastern Europe and Africa. "This is what I really love doing, fixing banks and then either selling or floating them, and I'm reasonably good at it," 38-year-old Gurgenidze told Samantha Shields in Tbilisi .
According to BusinessNewEurope Gurgenidze’s partner Patriciu, who moved Romanian oil company Rompetrol into profit before selling it to Kazakhstan's KazMunaiGas, is worth $1.8bn, according to Forbes magazine. The pair plan to raise between $200m and $300m from third-party investors over the next three years with a view to buying six or seven institutions. "We're going to be looking at small economies with low taxes where there is low corruption and general openness, so very similar to Georgia," Gurgenidze says.
Liberty bought 91.2% of People's Bank of Georgia on September 23 for $15m, $5m above book value. It is Georgia's seventh largest bank with a 3.5% market share and about $160m in total assets. Gurgenidze says he hopes to increase market share to as much as 10%, which would put the bank in Georgia's top five, and increase the free float on the Georgian Stock Exchange to between 20% and 25%. He also plans to sell Global Depositary Receipts and possibly list in London, and says Liberty is firmly committed to investing $10m in the bank over the next six months. Just doubling People's Bank's current market share would triple or quadruple Liberty's investment, he says.
People's Bank was heavily loss making last year, but Gurgenidze says that by concentrating on universal banking and good service, and not focusing on any particular niche in the relatively small market, it should be back in profit by the first quarter of next year.
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