Indebted Georgian Airways Up for Sale

Heavily indebted Georgian Airways, the country’s privately owned main airline, has been listed for sale at USD 150 Million by the Georgian Business Brokerage.

The announcement comes after the Tbilisi City Court accepted on December 29, 2021, the airline’s insolvency claims and declared it viable to enter into a rehabilitation regime, paving way for a debt moratorium.

According to the court decision, as of October 31, 2021, Georgian Airways owed a total of GEL 175.9 million (USD 57.2 million) to more than 70 agencies, providers, as well as to its 16,168 passengers. Its assets meanwhile amounted to GEL 21.4 million (USD 7 million).

The Court noted in its decision that the Covid-19 pandemic and epidemiological situation in Georgia caused the carrier’s financial crisis.

The former head of Georgian Airways, the current director-general of Georgian Business Brokerage, Roman Bokeria argued in January 17 interview with local media outlet Business Partner, that “a simple solution” out of the crisis would be if the Georgian government purchased 30-50% of the airline’s shares.

According to him, this would help the company to attract the necessary funding from international financial institutions.

80% of the shares of the carrier are currently owned by Davit Gaiashvili, its General Director, while 20% are held by Georgian Air Service.

The company, established in 1993 under the name of “Airzena”, employed more than 470 persons as of 2020. Ahead of the pandemic, it carried out 3,790 flights to 14 destinations in 2019.

Currently, according to its website, it operates flights from Tbilisi to six cities – Minsk, Tel Aviv, Moscow, Yerevan, Amsterdam, and Vienna. By the time of the insolvency filing, it had only 275 employees.

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