Tegeta Motors prepared to issue GEL 30 million bonds with the help of TBC Capital

Tegeta Motors prepared to issue GEL 30 million bonds with the help of TBC Capital

Tegeta Motors prepared to issue GEL 30 million bonds with the help of TBC Capital

The FINANCIAL -- The leading company in automotive products and services, Tegeta Motors Ltd., will issue over GEL 30,000,000 worth of bonds, which is the largest transaction to have occurred in the corporate lending segment of Lari so far in 2019.

The investment in bonds has been made by resident and non-resident institutional investors, banks, insurance companies and international financial institutions. The most significant part of the bond was purchased by the European Bank for Reconstruction and Development and it should be noted that this is the third such investment in bonds by EBRD.

The bonds are planned to be listed on the Georgian Stock Exchange in May, 2019. Tegeta Motors say that the company will use the funds attracted from the bonds to refinance existing bank loans, resulting in an extension of liabilities, diversification of the financing structure, and greater access to capital markets.

“The issuance of these bonds is an initial and important stage for the development and support of our future projects, for attracting resources, and for the successful implementation of future plans. From the very start, the main task for Tegeta has always been to be able to implement projects with greater potential; to realize large-scale goals that are very important for us. Therefore we were in need of financial resources for high growth. Whereas before, the company managed to fulfil these tasks with the help of a bank loan, and bank credit as the main instrument, today we have the necessary resources for the development of the company in the open market, as we have become an issuer.”

“What’s important is that the investment community trusts Tegeta Motors; trusts our past, present and future. In the development of any business this is a very important stage to reach. It means that we are a public, transparent, law-abiding and open business. These are the main values of Tegeta Motors. Our goal is not only to be a leader in the country, but in the whole region,” said Avtandil Tsereteli, General Director of Tegeta Motors.

The bonds, the total base amount of which is GEL 30,000,000, and the accrued interest – 425 Basic Points (Spread) added to the National Bank’s Monetary Policy (Refinancing) rate, was issued on 30 April, 2019. GEL 1,000 (thousand) as a nominal value bond and their redemption will take place on 30 April, 2022, at their root value.

“Our cooperation with Tegeta Motors extends back over 20 years, and this is one of the most important projects we have achieved as a result of our joint cooperation. Tegeta Motors issued a bond worth GEL 30 million that significantly improves the sources of financing of the Tegeta Group, makes it more diversified, and most importantly, is in the local currency which means that currency risks are minimized. The second thing that should be taken into consideration is the growth rate of Tegeta. It has been growing rapidly in recent years, and it is important to note that the resources available for financing are maximally stronger and have been protected from monetary risks, and this product has been achieved,” said Giorgi Tkhelidze, Deputy Head of TBC Bank.

“This year we think that we will issue GEL and currency bonds together to at least 5-6 companies. The Georgian business sector is mainly financed by bank credit which enables specially enhanced companies to have an opportunity to improve their financing resources, their cost, and insure against foreign exchange risks. Most importantly, it contributes to the development of the stock market in Georgia. Since at least a few companies are public, whose stocks or bonds are on the stock market, each such success contributes to the development of the capital market in Georgia,” he added.

TBC Capital is the subsidiary and licensed brokerage company of TBC Bank, which offers investment banking services. Since 2017, TBC Capital has become part of TBC Bank’s corporate and investment banking business. The main business directions of the company are: financial consultations and credit rating services; the issuing of bonds and shares; investment research and brokerage activities. TBC Capital is a shareholder of the Georgian Stock Exchange and plays an important role in developing the stock market’s infrastructure.

“This is Tegeta Motors’ Inaugural Fund, a public emission of GEL, which has made the company public. These operations will start at the Georgian Stock Exchange and this is the biggest public GEL emission released this year. TBC Capital and Tegeta Motors have been cooperating on this project for quite a long time already. Due to the fact that this is the first emission that TBC Capital has introduced in a renewed manner by NBG, Tegeta had to disclose more of its own information, which once again highlights the company’s high standards and transparency, and the fact that the company is one of the corporate leaders in its segment, and more widely in the region too. TBC Capital is pleased to have participated in this project,” said Irakli Elashvili, Director of TBC Capital.

Tegeta Motors is the first company in the auto industry in the Caucasus and Eastern Europe, to have been able to get a BB rating from an international ratings company. There are only a few companies in Georgia that hold such a rating, and this is an entirely unprecedented event for the region’s automobile industry. In March 2019, international ratings company Scope Ratings GmbH awarded the company a BB-credit rating with a stable prospect.