Bank of Georgia
JSC BANK OF GEORGIA ANNOUNCES TENDER OFFER FOR
PARTICIPATION NOTES ISSUED BY BG FINANCE B.V.
NOT FOR DISTRIBUTION TO ANY PERSON RESIDENT AND/OR LOCATED IN THE
This announcement does not constitute an invitation to participate in
the Invitation (as defined herein) in or from any jurisdiction in or
from which, or to or from whom, it is unlawful to make such offer under
applicable securities laws or otherwise. The distribution of this
announcement in certain jurisdictions (in particular the United States,
the United Kingdom, Italy, France and Belgium) may be restricted by law.
See “Jurisdictional Restrictions” below. Persons into whose possession
this document comes are required by the Joint Dealer Managers, Bank of
Georgia and the Issuer to inform themselves about, and to observe, any
such restrictions. No action that would permit a public offer has been
or will be taken in any jurisdiction by the Joint Dealer Managers, Bank
of Georgia or the Issuer.
London, 19 April 2011.
Joint Stock Company Bank of Georgia (“Bank of Georgia”) hereby
announces that it is inviting holders of the outstanding
U.S.$200,000,000 9.0 per cent. Loan Participation Notes due 2012 (the “Notes”)
issued by BG Finance B.V. (the “Issuer”) to submit offers (“Offers”)
to tender their Notes to Bank of Georgia for cash (the “Invitation”).
Bank of Georgia will determine the Purchase Price and the aggregate
principal amount of Notes to be purchased in accordance with a modified
Dutch auction procedure.
The Invitation is being made upon the terms and subject to the
conditions contained in the invitation for offers dated 19 April 2011
(the “Invitation for Offers”) prepared in connection with the
Invitation, and is subject to the jurisdictional restrictions set out
below. Capitalised terms used in this announcement and not otherwise
defined have the meanings ascribed to them in the Invitation for Offers.
Description of the Notes
U.S.$200,000,000 9.0 per cent. Loan Participation Notes due 2012
8 February 2012
U.S.$1,040 per U.S.$1,000 principal amount
U.S.$100,000,000 principal amount
(1) Bank of Georgia currently holds approximately 26.16% of the
aggregate principal amount of Notes outstanding, being
U.S.$52,318,000 in aggregate principal amount. The Notes currently
held by Bank of Georgia will not be subject to the Invitation. Bank
of Georgia intends to cancel the Notes it currently holds together
with all Notes purchased by Bank of Georgia pursuant to the
Invitation promptly on or after the Settlement Date.
Rationale for the Invitation
Bank of Georgia is, among other objectives, currently seeking to
optimise its liability portfolio and reduce the cost of its debt. To
support these objectives, Bank of Georgia wishes to use available cash
to reduce the amount of its outstanding debt. Bank of Georgia has
determined that only a portion of the aggregate principal amount of the
Notes currently outstanding is to be purchased pursuant to the
Invitation. The Notes purchased pursuant to the Invitation will be
tendered for cancellation by the Issuer on behalf of Bank of Georgia.
Modified Dutch Auction Procedure
Bank of Georgia is not committed to accept any tenders of the Notes and
will determine a purchase price for the Notes (the “Purchase Price”),
which will not be less than the Minimum Purchase Price, that it will pay
to holders whose tenders are accepted pursuant to the Invitation via a
modified Dutch auction procedure.
Bank of Georgia proposes to accept for purchase an aggregate principal
amount of Notes no greater than the Maximum Invitation Amount of
U.S.$100,000,000 (the “Maximum Invitation Amount”).
If the aggregate principal amount of the Notes validly tendered at or
below the Purchase Price exceeds the Maximum Invitation Amount, Bank of
Georgia will purchase Notes so tendered and not withdrawn, in the
following order of priority:
first, Notes tendered by way of a Non-Competitive Offer, subject to
secondly, Notes tendered by way of a Competitive Offer at a price
below the Purchase Price; and
thirdly, Notes tendered by way of a Competitive Offer at a price equal
to the Purchase Price, subject to possible pro-ration.
Notes offered pursuant to Offers at an Offer Price higher than the
Purchase Price will not be accepted.
Holders of Notes whose Offers are accepted by Bank of Georgia will
receive the Purchase Price together with Accrued Interest, even if they
made a Non-Competitive Offer or an Offer specifying a price lower than
the Purchase Price. Each tender of Notes reduced on a pro rata
basis will be rounded down to the nearest U.S.$1,000 principal amount,
provided that no Offer shall be accepted in this manner where the
acceptance of prorated Notes under the Offer would result in a residual
amount of Notes totalling less than U.S.$100,000 principal amount.
Bank of Georgia reserves the right, in its sole and absolute discretion,
not to accept any Offers, not to purchase any Notes, or to modify in any
manner any of the terms and conditions of the Invitation (including, but
not limited to, purchasing more than the Maximum Invitation Amount,
subject to applicable law).
Cash to be Received for Notes
Holders of Notes whose offers to tender are accepted by Bank of Georgia,
subject to any pro-ration, will receive for each U.S.$1,000 principal
amount of Notes purchased (subject to a minimum of U.S.$100,000
the Purchase Price; and
an amount in cash in United States dollars equal to the accrued but
unpaid interest for the period from and including the most recent
interest payment date for the Notes up to (but not including) the
Settlement Date (“Accrued Interest”).
Participating in the Invitation
To tender Notes pursuant to the Invitation, a holder should deliver, or
arrange to have delivered on its behalf, only through Euroclear or
Clearstream, Luxembourg and in accordance with the requirements of such
clearing system, a valid Electronic Offer Instruction that is received
by the Tender Agent by the Expiration Time.
Holders are advised to check with any bank, securities broker or other
intermediary through which they hold Notes whether such intermediary
must receive instructions to participate in the Invitation before the
deadlines specified in the timeline below.
Expected Transaction Timeline
Date and time (all times
Central European Time)
19 April 2011
Commencement of the Invitation and distribution of the Invitation
6 May at 5:00 p.m.
Invitation expires unless Bank of Georgia extends it or terminates
it earlier in its sole discretion.
By no later than 2:00 p.m. on 9 May 2011
Price Announcement Date
Bank of Georgia announces whether it will accept any Offers, and,
if so, the aggregate principal amount of Notes to be repurchased,
the Purchase Price and pro-ration factor, if any, for the Notes.
11 May 2011 (two Business Days after the Price Announcement Date),
or as soon as practicable thereafter
Bank of Georgia pays the Purchase Price plus Accrued Interest in
respect of any Notes being purchased.
A complete description of the terms and conditions of the Invitation is
set out in the Invitation for Offers. Citigroup Global Markets Limited
and VTB Capital plc are the Joint Dealer Managers for the Invitation.
Requests for information in relation to the Invitation should be
JOINT DEALER MANAGERS
Citigroup Global Markets Limited
Citigroup Centre, Canada SquareCitigroup Centre, Canada Square
London E14 5LBLondon E14 5LB
United KingdomUnited Kingdom
Management GroupAttention: Liability
Tel: +44 (0)20 7986 8969Tel: +44 (0)20 7986 8969
VTB Capital plc
14 Cornhill14 Cornhill
London EC3V 3NDLondon EC3V 3ND
United KingdomUnited Kingdom
Global Head of SyndicateAttention:
Global Head of Syndicate
Tel: +44 (0) 20 3334 8029Tel: +44 (0) 20 3334 8029
Requests for information in relation to the procedures for offering
Notes in the Invitation and the submission of Electronic Offer
Instructions should be directed to:
THE TENDER AGENT
Lucid Issuer Services Limited
Leroy HouseLeroy House
436 Essex Road436 Essex Road
United KingdomUnited Kingdom
Tel: +44 (0) 20 7704 0880Tel: +44 (0) 20 7704 0880
Pellicci / Thomas ChoquetAttn: Lee
Pellicci / Thomas Choquet
A copy of the Invitation for Offers is available to eligible persons
upon request from the Tender Agent.
The Joint Dealer Managers do not take responsibility for the contents of
this announcement and none of Bank of Georgia, the Issuer, the Joint
Dealer Managers, the Tender Agent, the Trustee or any of their
respective directors, employees or affiliates makes any representation
or recommendation whatsoever regarding the Invitation, or any
recommendation as to whether holders should tender Notes in the
Invitation. This announcement must be read in conjunction with the
Invitation for Offers. No Invitation to acquire any Notes is being made
pursuant to this announcement. Any such Invitation is only being made in
the Invitation for Offers and any such acquisition or acceptance of
Offers should be made solely on the basis of information contained in
the Invitation for Offers. This announcement and the Invitation for
Offers contain important information which should be read carefully
before any decision is made with respect to the Invitation. If any
holder is in any doubt as to the action it should take, it is
recommended to seek its own advice, including as to any tax
consequences, from its stockbroker, bank manager, solicitor, accountant
or other independent adviser.
This announcement and the Invitation for Offers do not constitute an
offer to buy or a solicitation of an offer to sell any Notes, and offers
of Notes will not be accepted from holders, in any jurisdiction in which
such offer or solicitation is unlawful. In any jurisdiction where the
securities or other laws require the offer to be made by a licensed
broker or dealer and in which either Dealer Manager or any of it
affiliates is so licensed, the Invitation shall be deemed to be made on
behalf of Bank of Georgia in such jurisdictions by such Joint Dealer
Manager or such affiliates (where it is so licensed), as the case may be.
The distribution of the Invitation for Offers is restricted by law in
certain jurisdictions. Persons into whose possession the Invitation for
Offers comes are required to inform themselves of and to observe any of
The Invitation does not constitute, and may not be used in connection
with, an offer to buy Notes or a solicitation to sell Notes by anyone in
any jurisdiction in which such an offer or solicitation is not
authorised or in which the person making such an offer or solicitation
is not qualified to do so or to any person to whom it is unlawful to
make an offer or a solicitation. Neither Bank of Georgia, the Issuer nor
the Joint Dealer Managers accepts any responsibility for any violation
by any person of the restrictions applicable in any jurisdiction.
The Invitation is not being made and will not be made, directly or
indirectly, in or into, or by use of the mails of, or by any means or
instrumentality (including, without limitation, facsimile transmission,
telex, telephone, email and other forms of electronic transmission) of
interstate or foreign commerce of, or any facility of a national
securities exchange of, the United States, and no Offer of Notes may be
made by any such use, means, instrumentality or facility from or within
the United States, or to U.S. persons or by persons located or resident
in the United States. Accordingly, copies of the Invitation for Offers
and any other documents or materials relating to the Invitation are not
being, and must not be, directly or indirectly, mailed or otherwise
transmitted, distributed or forwarded in or into the United States, or
to U.S. persons or to persons located or resident in the United States.
Any purported Offer of Notes resulting directly or indirectly from a
violation of these restrictions will be invalid and Offers of Notes made
by a person located or resident in the United States or any agent,
fiduciary or other intermediary acting on a non-discretionary basis for
a principal located or resident in the United States will not be
Each holder of Notes participating in the Invitation will represent that
it is not located in the United States and is not participating in the
Invitation from the United States or it is acting on a non-discretionary
basis for a principal located outside the United States that is not
giving an order to participate in the Invitation from the United States.
For the purposes of this paragraph, United States means the United
States of America, its territories and possessions, any state of the
United States of America and the District of Columbia.
The communication of the Invitation for Offers and any other documents
or materials relating to the Invitation is not being made and such
documents and/or materials have not been approved by an authorised
person for the purposes of section 21 of the Financial Services and
Markets Act 2000. Accordingly, such documents and/or materials are not
being distributed to, and must not be passed on to, the general public
in the United Kingdom, and are only for circulation to persons outside
the United Kingdom or to persons within the United Kingdom falling
within the definition of investment professionals (as defined in Article
19(5) of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005 (the “Order”)) or within Article 43(2) of
the Order, or to other persons to whom it may lawfully be communicated
in accordance with the Order.
None of the Invitation, the Invitation for Offers or any other documents
or materials relating to the Invitation have been or will be submitted
to the clearance procedure of the Commissione Nazionale per le
Società e la Borsa (“CONSOB”) pursuant to Italian laws and
regulations, and therefore the Invitation may only be made or promoted,
directly or indirectly, in or into the Republic of Italy (“Italy”)
pursuant to an exemption from the rules governing public purchases or
exchange offers (offerte pubbliche di acquisto o scambio) as
defined in article 1, paragraph 1, letter v of Italian Legislative
Decree no. 58 of February 24, 1998, as amended (the “Financial
Accordingly, the Invitation is not addressed to, and neither the
Invitation for Offers nor any other documents, materials or information
relating, directly or indirectly, to the Invitation can be distributed
or otherwise made available (either directly or indirectly) to any
person in Italy other than:
(i) to qualified investors (investitori qualificati) pursuant to
article 34-ter, paragraph 1, letter (b), of CONSOB Regulation No. 11971
of 14 May 1999, as amended from time to time (the “CONSOB Regulation”)
acting on their own account; or
(ii) in any other circumstances where an express exemption from
compliance with the restrictions on public purchases or exchange offers
applies pursuant to the Financial Services Act or the CONSOB Regulation.
Neither the Invitation for Offers nor any other documents or materials
relating to the Invitation have been submitted to or will submitted for
approval or recognition to the Belgian Banking, Finance and Insurance
Commission (Commission bancaire, financière et des
assurances/Commissie voor het Bank-, Financie- en Assurantiewezen)
and, accordingly, the Invitation may not be made in Belgium by way of a
public offering, as defined in Article 3 of the Belgian Law of 1 April
2007 on public takeover bids or as defined in Article 3 of the Belgian
Law of 16 June 2006 on the public offer of placement instruments and the
admission to trading of placement instruments on regulated markets
(together, the “Belgian Public Offer Law”), each as amended or
replaced from time to time. Accordingly, the Invitation may not be
advertised and the Invitation will not be extended, and neither the
Invitation for Offers nor any other documents or materials relating to
the Invitation (including any memorandum, information circular, brochure
or any similar documents) has been or shall be distributed or made
available, directly or indirectly, to any person in Belgium other than
“qualified investors” in the sense of Article 10 of the Belgian Public
Offer Law (as amended from time to time), acting on their own account.
Insofar as Belgium is concerned, the Invitation for Offers has been
issued only for the personal use of the above qualified investors and
exclusively for the purpose of the Invitation. Accordingly, the
information contained in the Invitation for Offers may not be used for
any other purpose or disclosed to any other person in Belgium.
The Invitation is not being made, directly or indirectly, to the public
in the Republic of France (“France”). Neither the Invitation for
Offers nor any other documents or materials relating to the Invitation
have been or shall be distributed to the public in France and only (i)
providers of investment services relating to portfolio management for
the account of third parties (personnes fournissant le service
d’investissement de gestion de portefeuille pour compte de tiers)
and/or (ii) qualified investors (investisseurs qualifiées) other
than individuals in each case acting on their own account, all as
defined in, and in accordance with, Articles L.411-1, L.411-2 and
D.411-1 to D.411-3 of the French Code monétaire et financier, are
eligible to participate in the Invitation. The Invitation for Offers has
not been and will not be submitted for clearance to nor approved by the Autorité
des Marchés Financiers.