TBC Capital Successfully Places $10 million Nikora Bonds

TBC Capital has successfully finalized a placement of 10 million USD worth of bonds issued by the Georgian company Nikora , after several months of working on the project. This is regarded as one of the largest placements by a non-financial organization in the local market.

Bonds have a two-year maturity and carry annual 9% interest paid out quarterly. TBC Capital arranged the deal, carried out marketing and placed the bonds with both local and foreign investors.

Considerable work has been done in order to gauge the market risk appetite and price the bonds correctly.

“This is a very important step for the Georgian market and we are delighted that with the help of our subsidiary company, this offering was carried out successfully and effectively,” said Vakhtang Butskhrikidze, General Director of TBC Bank.

TBC Capital is an advisory arm of TBC Bank offering corporate advisory, research and brokerage solutions in Georgia. It is committed to playing an active role in the development of capital markets in Georgia. TBC Capital supports both institutional and strategic investors in exploring investment opportunities in Georgia while at the same time allowing domestic companies access to additional forms of funding outside the traditional bank loan financing.

TBC Capital was established in 1999, and until 2015 it largely concentrated on brokerage and custody solutions. In 2015, Research and Corporate Advisory units were launched, transforming the company’s platform from a purely brokerage unit into an investment banking boutique, providing services tailored for the Georgian market.

“We’re very glad to be helping the company to place such a large issue. We think investors’ interest was strengthened by Nikora’s long history, as well as its leading position on the local food production and retail sales market, and of course by the appropriate pricing of the bonds,” George Tkhelidze, TBC Bank Deputy Director, said at the press conference held at TBC Bank’s head office on Thursday.

“We think transactions of this caliber will promote further development of capital markets in the country and will encourage other Georgian companies to consider similar fundraising avenues,” he added.

“I would like to congratulate TBC Capital, TBC Bank and Nikora on the placement of the bonds, which is a significant step towards capital market development,” Nino Javakhadze, Deputy Minister of Economy and Sustainable Development of Georgia noted.

As Irakli Bokolishvili, General Director of Nikora noted, the supermarket chain of Nikora Group had issued 5 million USD worth of bonds last year, and this new placement will give them the opportunity to gain more financial flexibility and diversify their funding resources.

Nikora is considered to be one of the most successful companies in the Georgian food processing and retail sales market. Founded in 1998, Nikora currently produces meat, fish, milk, ice cream, baked goods, salads and other products. It brings together the largest number of food retail outlets under the company holding. Nikora is one of the first among Georgian companies to have ISO 9001, ISO 2200 and HACCP accreditation.

“This is the largest placement of a nonfinancial company on the Georgian market thus far, and the sole fact that it was easier to do it this year, rather than the last year means that the capital market is truly developing. Approximately two-thirds of (mostly retail) investors were local, the rest foreign. It shows that Georgian investors are ready to take Georgian company risks. By all means, this is a very interesting and beneficial step forward,” Avto Gigineishvili, TBC Capital Co-head pointed out.

Nino Gugunishvili