It will be the first Georgian company to be admitted to the London market, just three years after it became the first Georgian firm to issue a Eurobond, raising $200m in 2008.
Bank of Georgia, which raised $139m (£85.7m) from listing its GDRs in 2006, will create a new holding company and swap all its GDRs for shares in the new entity on a one-for-one basis.
Chief executive Irakli Gilauri, whose brother is Georgia’s Prime Minister, said the bank was well-capitalised and strongly positioned.
“We believe Bank of Georgia offers UK equity investors exposure to a fast-growing emerging market through a leveraged play that has demonstrated its resilience in recent years,” he said in a statement.
The bank wants access to a more liquid market and a broader investor base than GDRs can supply, as it plans to raise more capital to fund both its physical expansion and asset base.
It is also understood to be preparing to raise a further $250m from a second Eurobond as it seeks to diversify its sources of wholesale capital.
Sources familiar with the situation told City A.M. the move was also a response to the market uncertainty since the financial crisis, which has made investors prefer to hold shares rather than GDRs in emerging market companies.
The bank has also now had time to adjust to the strict corporate governance requirements imposed by the LSE, and is better prepared to move to a premium listing.
Bank of Georgia said its home country was under-banked and both the financial sector and the wider economy were expected to grow substantially in the coming years.
It provides 36 per cent of all loans issued in Georgia, holds 34 per cent of all deposits there and grew its net income 139 per cent year-on-year in the first half of 2011.
“The bank is growing well and in the future they are going to look more and more to capital markets to fund their business,” one source said.
MEET THE ADVISER: ING
NATHALIE BACHICH DE RECINA
HEAD OF ECM FOR EMERGING MARKETS
ING Bank is advising Bank of Georgia on its planned listing, fielding a team that includes Nathalie Bachich de Recina, who was recently appointed managing director and head of equity capital markets for emerging markets. With ING since 1998, Bachich de Recina is responsible for central and eastern European equity capital markets, with focus on Poland and Russia. She reports to Willem-Jan Meijer, global head of equity capital markets and Pierre Chabrelie, head of clients and corporate finance. Also advising is Daniel Friedman, director of corporate finance. Friedman has worked for 11 years with ING, seven of them in the emerging European team.
The team’s recent deals include the €104m (£91m) rights issue and Polish public offering of Nova Kreditna Banka Maribor in May – the first listing of a Slovenian issuer on Warsaw Stock Exchange.
It also advised on the 400m Polish Zloty (£83m) accelerated global tender of Kernel Group in 2008, as well as Exillon Energy’s $280m (£174m) placing on the London Stock Exchange in May this year and the 3.17bn Polish zloty (£657m) bookbuilding for Polish insurance group PZU in June.