Tender announced for the privatisation of Georgian Airlines

Published: 5/21/1999

A tender has been declared on the purchase, for $25m, of a 49% stake in Georgian Airlines. The company reputedly has 21 planes. Concise Aerospace can only verify a much smaller fleet comprising: • 2 Tu-134 • 3 Tu-154 • 4 Yak-40s Georgian Airlines also has a repair facility, 10 licenses and $ 3m worth of debt, which the tender winner is obliged to cover. The tender is seen as a means of raising the $12m dollar investment required for staff training and the introduction of modern marketing and management principles. However, any new owner is not only required to cover debts, but to purchase two planes, and to guarantee jobs or to provide redundant staff with social guarantees. On the face of it, this looks like a rather poor deal for any potential buyer, particularly for a minority investor, whom would doubtless have the Georgian state as its partner and majority shareholder. The designated $12m for training also seems a little suspect, given that a good trader could probably acquire the whole fleet for a similar sum.

Article ID: 528