Georgia’s Silknet raises 300 million US dollars in landmark eurobond issue

International markets are increasingly recognising the significant investment potential Georgia has to offer.

Georgia’s leading telecommunications company, Silknet, has successfully raised 300 million US dollars in a new bond issue.

The newly financed eurobond will see the company join JP Morgan’s CEMBI Index, one of the leading listings of emerging market bonds, for the very first time. Due to the nature of the bond, for the first time onshore US investors are able to take part in the fund-raising, opening a major new investor market for the company.

The new figure represents a 100 million US dollars increase on what the company raised in an earlier funding round back in April 2019 and follows an improved outlook from ratings agency Moody’s. The proceeds were used, in part, to pay for the call on the prior eurobond.

The issue also saw a substantial reduction in the coupon rate to 8.375 per cent from 11 per cent, with a comparable yield to other major telecoms operators in the region, such as Turk Telekom, demonstrating the company’s strong investment prospects.

Speaking on the news, Silknet CEO David Mamulaishvili said: “This successful fundraising is testament to how far Silknet has come in recent years. The new financing will improve the company’s liquidity and ensure we continue to deliver a high-quality service to our clients. Silknet is at the forefront of delivering high-quality, reliable communications services across Georgia. Today’s news shows international investors recognise the strength of the business and its potential for future growth.”

Georgia’s investment potential

Silknet delivers mobile, fixed broadband, pay television and fixed-line services to approximately two million customers across Georgia having begun operations in 2010 as a fixed-telecom operator.

In 2018 Silknet acquired major domestic mobile service provider, Geocell, in what was the largest purchase of one company by another in Georgian history.

George Ramishvili, Silknet chairman, added: “This successful refinancing is another sign that international markets increasingly recognise the significant investment potential Georgia has to offer. It is testament to the hard work of the Silknet team that we are today able to raise significant funds to continue to develop and grow the country’s flourishing telecoms sector.”

Furthermore, following proactive engagement with ESG rating’s agency, Sustainanalytics, they announced an improved ESG risk score for the company. Silknet now sits at the higher end of global telecoms companies in terms of the sustainability of their operations.

The successful bond issue comes despite a relative lack of new issues from emerging markets in recent months.

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