Kazakhstan-based Bank Turan Alem (BTA), which bought 90.65% of former state-owned local telephony operator United Telecom of Georgia (UT) for USD90 million last month, has told the Georgian media that it is confident it can boost the performance of the national telco by providing the investment and management expertise it needs to compete effectively. A BTA spokesman said that UT possesses ‘great potential’ but had suffered from a legacy of ‘management problems’ due to it being run by the state for so long.
According to TeleGeography’s GlobalComms database, the Georgian government sold its stake in UT (formerly known as Georgia Electrical Communications, GEC, or Sakartvelos Elektrokavshiri) in an auction held on the 12 May 2006 after setting a starting price of USD50 million. Hoping to raise more than USD70 million, it exceeded its target after the price was bumped up by competitive bids from other companies including US-based Metromedia International, the holder of stakes in long-distance provider Telecom Georgia and mobile operator MagtiCom. The state stipulated that the purchaser should pay 50% of the asking price within one month of agreeing a sale, and 100% within three months, and that it must maintain the company’s existing operations for a minimum of three years. BTA has recently invested over USD100 million in Georgian real estate. The bank’s shareholders include the European Bank for Reconstruction and Development, Austrian Zentralbank, International Finance Corporation (part of the World Bank Group) and the Netherlands Development Finance Company. It has a presence across the CIS, Russia and China.