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Chinese Group, other Asian and European Investors Intend to Buy Basis Bank

Published: June 19, 2012 | 12:33 pm
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The COMMERCIAL TIMES

Basis Bank, Georgia’s 11th largest bank, appears to become an interesting investment for foreign groups. Recently, Financial Times wrote about the Chinese Xinjiang Hualing Industry and Trade Group intended to buy the bank at around USD 100 million.

Tamar Khaduri, Head of Marketing, Product Development and Public Relations Department of Basis Bank confirmed that negotiations with the Chinese Group are underway.

“We’re having negotiations with Chinese and other Asian investors, also with Europeans. However, no final solution has been made yet. I’m happy to see such a growth interest towards our bank from foreign investors as it’s another proof that Basis Bank, with its 20 years of experience on the local market, remains a reliable and transparent bank with right management,” Khaduri told The COMMERCIAL TIMES.

Basisbank launched operatin in 1993. In 2008 an Agreement was concluded between the European Bank for Reconstruction and Development and JSC Basisbank – EBRD acquired 15 % equity stake in Basisbank.

According to Fianncia Times, Xinjiang Hualing Industry and Trade Group, the company founded in the far western city of Urumqi in 1988, is in the process of securing regulatory approval to acquire 90 per cent of Basisbank, Georgia’s 11th largest bank in terms of assets.

Zhang Jun, Xinjiang Hualing’s chief financial officer, told beyondbrics in Shanghai on Monday that the vendors were twelve shareholders, headed by the European Bank for Reconstruction and Development, with 15 per cent, and the bank chairman Zurab Tsikhistavi, who holds 13.9 per cent. The EBRD, eastern Europe’s development bank, and Tsikhistavi would each retain 5 per cent stakes, he said.

“Whoever buys the bank, the EBRD will remain the stakeholder,” said Khaduri. “Entrance of an influential  investor will condition the bank’s development into a large-scale player on the local market.”

As Financial Times reported, Xinjiang Hualing, a diversified conglomerate, is no stranger to Georgia, having first invested in 2006 in forest products. With $100m already invested in the country, it is planning to expand the total to $500m, including $300m for a free trade zone/industrial park near Tbilisi, plus money for the bank purchase and other investments.

Speaking earlier at an Shanghai investment conference Zhang said that the company had been first attracted to Georgia because of its “beautiful forests”. Zhang praised Georgia’s business-friendly policies and open approach to foreign investment, for example on-arrival visas for Chinese visitors.

According to its website, Basisbank had assets of GEL 154m at the end of March, compared to GEL 159m at the end of 2011. Last year it made pre-tax profits of GEL 3.52m, up from GEL 2.07m in 2010.

 

 

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