Capital Locus completed its investment and deal advisor mandate of Tbilisi Dry Port – a greenfield investment project in Tbilisi, Georgia, initiated by the founding shareholder Mr. Jemal Inaishvili. Before the project’s commencement two strategic investors became shareholders of Tbilisi Dry Port and a loan in the amount of USD 15 Mill was secured.
Tbilisi Dry Port is developed as a multimodal inland terminal providing transfer of containers between different modes of transportation – rail and road. It is designed mainly to extend Batumi and Poti Sea ports to the Capital city of Georgia, Tbilisi, away from Georgian coastal borders. It will be operating as a center for the transshipment of ocean cargo to inland destinations in Caucasus and CIS countries.
The Project consists of an inland container depot with a throughput capacity of 200,000 TEUs per year, a container freights station, a car terminal, A and B class warehouses and a customs bonded zone. The company will start its operations in Q4 2024.
Mr. Jemal Inaishvili, founding shareholder and chairman of the supervisory board of Tbilisi Dry Port, said:
“Given the importance and the scope of the project, I wanted to thoroughly elaborate on the investment case of Tbilisi Dry Port. For that purpose, we engaged Avtandil Gogoli and his company Capital Locus as an investment advisor. Capital Locus developed a comprehensive commercial viability study of the project and consequently was mandated as my deal advisor for equity and debt transactions in Tbilisi Dry Port.
As you know, Abu Dhabi Ports Group from UAE and Wilhelmsen Ports Services SA from Norway became shareholders of Tbilisi Dry Port. Besides these equity transactions, a loan of USD 15 million was secured from the Bank of Georgia.
The completed equity and debt transactions in a greenfield project during its development phase indicate that the sustainability and commercial viability of the Tbilisi Dry Port was thoroughly studied, prepared, communicated, and partnerships well negotiated. This is an outcome of intensive and consistent work.
During this entire process, Avtandil acted as my trustee together with my management team leader Mr. Joseb Gorgiladze.
Avtandil is for the right solutions and not for easy solutions. He analyzes every potential contractual engagement over its lifetime and works to find consensuses for fair agreements. At the same time when faced with inconsistencies from counterparties or a proposition that is not in the best interest of the shareholders, he doesn’t hesitate to say final no, calls the end of the discussion, even when negotiations are quite advanced.
This attitude combined with his experience in investment projects and finance makes Avtandil a reliable and efficient trustee for a shareholder. I want to thank him for his valuable contribution to Tbilisi Dry Port and congratulate him for completing the mandate.”
Avtandil Gogoli, managing partner of Capital Locus, said:
“In any greenfield investment project, one always has to cope with uncertainties as far as investment costs of the project and earnings power of the future enterprise are concerned. These are two critical components based on which a) shareholders make decisions on equity allocation and b) the optimal capital structure of the project is defined, including leverage, making sure that future enterprise will comfortably service its loans.
In the first place, a coherent feasibility study of Tbilisi Dry Port was developed and its commercial viability was thoroughly stress tested. Having it completed I knew that we had a promising investment case.
Regarding the project sponsor, Mr. Jemal Inaishvili has an extraordinary track record in attracting foreign direct investments and know-how in Georgia. Mediterranean Shipping Company (MSC), Medlog, Wilhelmsen and now Abu Dhabi Ports Group, these leading global operators in the transportation and logistics sector have made their first investments in Georgia in joint ventures with Mr. Inaishvili. This is quite an achievement for an entrepreneur.
Completing the debt or equity transactions is only a matter of consistent work when you are equipped with a convincing investment project sponsored by an investor of an excellent background. Abundant institutional money out there is looking for good investment projects with good sponsors.
Fast forward, as a result of intensive discussions and negotiations, first Wilhelmsen Ports Services SA from Norway and then Abu Dhabi Ports Group from UAE became equity partners of Tbilisi Dry Port. Needless to say, these companies carefully and diligently consider every investment opportunity, especially greenfield project, by involving their in-house professionals with extensive experience in the field and specialized buy-side external advisors.
In parallel, on the debt side, we had advanced discussions with two international lenders and two local banks. They expressed interest in getting exposed to the project by providing a senior loan. We offered them comfortable mechanisms for mitigating the market and project completion risks. Based on consistency and efficiency of processing, it was decided to cooperate with the Bank of Georgia, which provides USD 15 Mill senior secured loan for the development of Tbilisi Dry Port.
I want to express my gratitude to Mr. Jemal Inaishvili and Mr. Joseb Gorgiladze for our engagement in Tbilisi Dry Port and for their confidence in us which I always felt while working on Tbilisi Dry Port.”