Update on Georgia Capital’s holding in GHG

Georgia Capital PLC (the Group or Georgia Capital) holds 57% of the equity shares of Georgia Healthcare Group PLC (GHG), the parent company of the largest and most diversified healthcare provider in Georgia, which operates in the healthcare services, pharmacy and medical insurance sectors. GHG (ticker: GHG) is a London Stock Exchange listed portfolio company. At the time of the demerger from BGEO Group PLC, Georgia Capital announced that it was highly probable that the Group would own less than a 50% stake in GHG at the end of 2018.

In light of the prevailing market conditions, the board of directors of Georgia Capital believes that the current share price significantly undervalues the performance and prospects of GHG and has, therefore, concluded that a further reduction of the Group’s holding in GHG, at this time, will not be in the best interests of its shareholders. As such, it no longer expects to own less than a 50% stake in GHG at the end of 2018. Therefore, starting from the second half of 2018, Georgia Capital will fully consolidate GHG’s financials in its IFRS statements.

Management Commentary

"Over the last few months GHG’s share price has, in our view, not reflected the company’s strong performance and excellent growth prospects. GHG’s fundamentals have been steadily improving over the last few quarters, and it delivered 22% EBITDA growth in 1H18. We manage our capital needs such that we do not depend on premature liquidation of our listed investments. Based on our capital allocation outlook, our net investment plans for the next three years of GEL 128 million are comfortably funded through existing liquid funds and short-term loans issued, which currently stand at GEL 604 million.”

This announcement contains forward-looking statements, including, but not limited to, statements concerning expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions, competitive strengths and weaknesses, plans or goals relating to financial position and future operations and development. Although Georgia Capital PLC believes that the expectations and opinions reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations and opinions will prove to have been correct.

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