- The strategic investor is the Asian Development Bank (ADB)
- The transaction was supported by TBC Capital and Galt & Taggart
Tegeta Holding, a leading company in the automotive industry, successfully placed Sustainability-Linked Bonds (SLBs) denominated in GEL, with a total volume of 260 million. This marks the first issuance of SLBs in GEL on the Georgian capital market, and represents one of the largest transactions to date. The interest rate on the securities is set at 6-month TIBR + 3%.
Fifty percent of the principal amount of the bonds will be redeemed within three years, with the remaining portion to be repaid over the following five years. Investors will receive interest payments on a semi-annual basis. The primary investor in the Sustainability-Linked Bonds is the Asian Development Bank (ADB). The investment portfolio is diversified, with a portion of the securities, including those with sustainable development status, also being acquired by local financial institutions.
The funds raised through this issuance will be fully utilized to contribute to the achievement of the Sustainable Development Goals.
Ekaterine Kavtaradze, Chief Executive Officer of Tegeta Holding: “The placement of Sustainability-Linked Bonds denominated in the national currency is an unprecedented event in the capital market of the country, and the region as a whole. This move clearly demonstrates Tegeta Holding’s strong position as a seasoned and highly reputable corporate issuer, while also reflecting its strategic vision to develop financial instruments that adhere to SLB standards and contribute to overall environmental benefits.
“Tegeta is following its long-term strategy by continuing to invest in projects aimed at enhancing operational efficiency, strengthening environmentally friendly infrastructure, and maintaining its leading position in the region. We believe that these financial instruments not only enhance our competitiveness, but also positively impact the development of the local capital market and open up new opportunities for private sector players, particularly in the automotive industry.”
The framework document, which outlines the issuer’s commitments, was prepared in consultation with the Asian Development Bank (ADB). Clearly defined objectives must be achieved within the timeframe specified in the prospectus. As part of its sustainable transformation, Tegeta Holding is responsible for implementing a fully low-emissions business model. In addition, the company will use a portion of the funds raised through this SLB issuance to develop leasing and fleet management services, contributing to the gradual replacement of vehicle fleets in Georgia and Armenia. This will increase the share of environmentally friendly, hybrid, and electric vehicles. Furthermore, Tegeta remains committed to the uninterrupted expansion of energy-efficient infrastructure.
Lesley Bearman Lahm, ADB Country Director in Georgia: „We are delighted to deepen our partnership with Tegeta after our successful collaboration on Georgia’s first local currency green bonds in 2023. This transaction does more than advance green transport; by issuing in GEL, it plays a crucial role in deepening Georgia’s own capital markets and sets a vital precedent for low-carbon-aligned investment across the entire Caucasus region.”
Tegeta Holding has issued sustainability-linked securities in partnership with TBC Capital and Galt & Taggart. BLC and Dentons served as legal advisors to the transaction.
Giorgi Kuprashvili, General Director of Galt & Taggart: “We are delighted to once again contribute significantly to the development of the local capital market and to collaborate with such a significant partner as Tegeta Holding. The issuance of sustainability-linked bonds worth GEL 260 million marks an important milestone for both our company and the market.
“This transaction clearly demonstrates that, with the involvement of international financial institution and leading local investors, the Georgian capital market is ready to offer large-scale, long-term instruments.
“Tegeta is further strengthening its position as an active issuer, and our long-standing cooperation clearly reflects our confidence in the market, and its growing development potential.”
This is the second transaction related to sustainability that Tegeta has carried out in collaboration with TBC Capital. In 2023, the financial institution supported Tegeta Holding’s “green” bond issuance.
Otar Sharikadze, Director of TBC Capital: “TBC Capital and Tegeta Holding have a long-standing partnership, under which bonds worth more than GEL 600 million have already been issued. The latest issuance of securities worth GEL 260 million is the largest joint project we have implemented to date.
“These are the first sustainability-linked bonds denominated in Lari, and supporting such transactions is a priority for TBC Capital. The experience of Tegeta Holding clearly demonstrates that the development of the capital market in Georgia has created opportunities for Georgian companies to access large-scale financing in the local market.”
In 2019, Tegeta successfully completed its initial issuance on the Georgian capital market, issuing bonds worth GEL 30 million. The company’s subsequent bond issuance included the largest transaction denominated in the local currency, with a total value of GEL 150 million.
In 2023, Tegeta Holding made its debut in sustainability-linked financing within the automotive sector by issuing securities in GEL for the first time. This marked a significant milestone for the company, contributing to the integration of ESG (environmental, social, and governance) principles into the automotive industry.
About Tegeta Holding: Tegeta Holding is the largest automotive company in the Caucasus and Central Asia. It offers customers a comprehensive range of automotive solutions, including light vehicles, trucks and construction vehicles, serving commercial, public and industrial transportation needs. Tegeta operates 28 service centers across the country, and exclusively represents renowned automotive brands such as Porsche, Lamborghini, Bentley, Volvo, Toyota, Mazda, Geely, and Zeekr. In the segment of heavy trucks and specialized equipment, Tegeta partners with leading brands, including MAN, JCB, Hino, Liebherr, and BOMAG, among others. As an importer, Tegeta brings more than 300 leading car brands to Georgia. With approximately 3,000 employees, Tegeta holds a significant position as one of the leading employers in the country.
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