The European Bank for Reconstruction and Development (EBRD) announced on September 22, that it will issue an unsecured loan of EUR 217 million to help the Georgian Oil and Gas Corporation (GOGC) refinance a USD 250 million corporate eurobond.
The state-owned GOGC, supplier of 20% of the country’s electricity generation, placed a USD 250 million eurobond in 2012 on the London Stock Exchange with a maturity of five years. In April 2016, the Corporation re-issued the eurobond and repaid the financial commitments made in 2012 in advance.
As stated by EBRD, the eurobond matures on April 26, 2021, however, the company is unable to repay the debt due to the economic downturn caused by the COVID-19 pandemic.
According to the Bank, the proceedings of the loan will be used to refinance the maturing bond, in order to support “a vital infrastructure provider in Georgia at a time of stressed economic conditions caused by the COVID-19 crisis,” by easing cash flow pressure, addressing liquidity constraints, and enabling the company to access capital markets.