The EBRD to Acquire 21% of GRDC Stakes

The EBRD to Acquire 21% of GRDC Stakes

The FINANCIAL -- With a loan of USD 42.6 million and the purchase of a 21 percent stake worth USD 15 million, EBRD financing will assist the Georgian Reconstruction and Development Company (GRDC) in the construction, refurbishment and operation of four commercial properties: two office buildings, a shopping centre, and railway station. The facility is EBRD’s first direct financing in Georgia’s property sector.


The EBRD is investing 57.6 million to support the Georgian Reconstruction and Development Company (GRDC) in its programme to bring international standards of real estate development to commercial property projects in the Georgian capital of Tbilisi.


“There’s a kind of competition on financing projects of GRDC. IFC and the EBRD are the two international organizations providing equal contribution to our projects,” claimed Irakli Kilauridze, CEO of GRDC.


On October 15, 2007 GRDC and EBRD (European Bank for Reconstruction and Development) signed an agreement at the Courtyard by Marriott hotel. The agreement was signed by Mamuka Khazaradze the President of GRDC and by Michael Davey, EBRD Director for the Caucasus, Moldova & Belarus.


The facility was arranged by Argo Saint George LLP (ASG), a corporate finance adviser with offices in London and Tbilisi. ASG focuses on advising, and raising debt and equity for enterprises in Georgia, it has arranged over USD 150 million of financing for Georgian companies over the last twelve months.


“EBRD becoming a 21% stakeholder at GRDC is owing to 10 years of successful cooperation between the two. ( ten years of cooperation in TBC and maybe in  Borjomi as GRDC was founded only in 2004) We welcome the EBRD’s cooperation which will significantly contribute to our efforts to supply quality product to Georgia’s emerging real estate market. It will also help the transfer of skills and know-how to the local economy during the construction, implementation and management of the projects,” declared Mamuka Khazaradze, GRDC’s President.


The EBRD regional director declared he is looking forward to supporting GRDC’s aim of introducing international standards of real estate development in the city while fully respecting the existing Tbilisi architecture.


“The EBRD has a long history of engagement with GRDC. We’re investing in GRDC because we have good properties and we like the company’s management. The EBRD has been in Georgia since 1993 and I would say it’s one of the key countries the EBRD’s doing business in. This project will have a strong demonstration effect to other investors seeking to attract international financing to this booming sector,” stated Michael Davey, EBRD Director for the Caucasus, Moldova and Belarus.


The EBRD, one of the largest private sector investors in Georgia, has to-date signed a total of 72 investment projects in the country covering energy, transport, agribusiness, general industry and banking for a total commitment of almost EUR 400 million.


“When Mr. Khazaradze, Mr Japaridze and I started the business in 1992, (Borjomi)  Georgia was at the very early stages of development. Unlike those hard times today we see the bright future as not only the sun is shining in the country but you also have electricity supply. I’m very grateful to the EBRD for making that progress possible,” declared Bob Meijer, Chairman of GRDC


On September 27, 2007, IFC, a member of World Bank Group, announced about investing in the Georgian Reconstruction and Development Company’s real estate development projects, which will address Georgia’s increasing demand for quality commercial and residential real estate infrastructure in urban areas. The USD 48 million debt financing will also help create jobs and contribute to growth.


GRDC was founded in 2004 by the first foreign investor in Georgia, Bob Meijer, and local partners Mamuka Khazaradze and Badri Japaridze.


GRDC is a leading real estate and development company, with operations in the Republic of Georgia. The company invests in and develops office, retail, resort and prime residential properties. Its high quality portfolio of 22 key sites, predominantly located in the country’s capital, Tbilisi, has circa 2 million square meters of potential development.


GRDC’s pilot project was the Class A Green Building office centre located at 6 Marjanishvili Street, Tbilisi, and the company is now developing the following projects: 7 Freedom Square (former Tsekavshiri Building), Central Railway Station, Lisi Lake and Cinema City.


A feature of GRDC’s commitment to sustainable and responsible development is its objective of working closely with international property professionals to create buildings and spaces that provide exciting, vibrant and functional working and living environments.