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(Alliance News) - Georgia Capital PLC said on Friday that its subsidiary JSC Georgia Capital has agreed to sell an initial 80% of Georgia Global Utilities JSC, a water works business, to FCC Aqualia.
Shares in Georgia Capital close up 11% at 713.00 pence on Friday in London. The stock is up 33% since January 4.
The Tbilisi-based investor in businesses in Georgia said Aqualia and JSC Georgia Capital also have granted each other put and call options over the remaining 20% of the water utility.
Aqualia is a water company with a presence extending across Europe, America and the Middle East and North Africa region.
For the initial 80% stake, Georgia Capital will receive USD180 million in cash. This values the entire water utility at USD225 million, a substantial premium to its latest independent investment value on June 30, Georgia Capital noted.
Georgia Capital said the disposal is consistent with its strategy of demonstrating the value and attractiveness of the group's investment portfolio through a trade sale. It will call a general meeting of shareholders for late January to approve the sale.
The company added it was the first time it had completed a full investment cycle for one of its main assets.
Georgia Capital said it intends to deploy the cash received in a combination of share buybacks, investments in securities, increasing its cash balance, further investments, and lending to portfolio companies.
Further, Georgia Capital said the disposal would translate into a 2.2% uplift to the company's net asset value as at September 30 as well as have a positive impact on the group's leverage profile, reducing its market value leverage from 25% as at September 30 to approximately 20%.
By Heather Rydings; heatherrydings@alliancenews.com
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