Poti Port stocks to be divested
11 November, 2010
Poti Port stocks to be divested

Stocks of Poti Port that is run by the United Arab Emirates’ RAK Investment Authority (RAKIA), is to be put at international stock exchanges in 2011. Neither the volume of the stocks that are supposed to be divested nor the date of their allocation at international market is known as of yet.
The UAE-based Rakeen Development acquired 100% of Poti Port under a 49-year lease term in 2008 and undertook an obligation to develop Free Industrial Zone (FIZ) within 300 hectare

of territory adjacent to the area. Now it plans to divest certain portion of Poti port stocks via international stock exchanges in the coming year. Rakeen Development took over the controlling package of Poti Port in April of 2008 for USD 90 million and acquired the remaining 49% later the same year for USD 65 million. 
Poti FIZ was expected to become a driving force for entire Georgian economic development. USD 400 million investments were planned to be implemented there till 2011 so as to create FIZ and build a completely new port infrastructure. Moreover, government believed that USD1 billion would be invested in Poti FIZ that was supposed to have a positive economic effect on the entire West Georgia. However, the project was affected by the August war of 2008 and global financial crisis and the UAE been the largest foreign investor in Georgia in 2008 and 2009 with USD 306.5 million and USD 169.8 million, respectively [via RAKIA mainly] did not invest anything in the first quarter of 2010, according to the Georgian state statistics agency. FIZ opening ceremony was twice delayed this summer and is scheduled by November 23, 2010 coinciding with the 7th anniversary of Rose Revolution.
Instead of expected USD 400 million investment, Rakeen invested about USD 40 million in the FIZ project as of yet and managed to attract 25 companies [from Armenia, Ukraine, Turkey, Azerbaijan, Iran, UAE and Georgia itself] out of which only two operate there at the moment. The number of licensed companies is supposed to double by the end of the year, Sophia Mamardashvili, PR & Event Manager of Rakeen Development LLC, told Georgian Journal.
Capacities of Poti Sea Port enhanced thanks to Rakeen’s investments; a new wharf was constructed and the rehabilitation works over the existing infrastructure are still ongoing.  A new port project is developed within the territory adjacent to the old port. A new container terminal capable to process about 100 thousand containers per year will open up in November and a new customs check-point is also to be opened near the terminal. RAK Group also participates in the Poti Airport reconstruction project construction works of which are scheduled to start in 2011 and be completed by 2013.
However, in July of this year Khater Massaad, the CEO of Ras Al Khaimah Investment Authority (RAKIA), announced of his intention to put Poti Port on Initial Public Offering (IPO) in 2011 as reported by Reuters. On November 2, 2010 Georgian media, based on the interview of Massaad given to Arabian-based Zevia, reported of RAKIA’s intention to divest Poti Port management right altogether in 2011.
RAK Group denounced the information immediately and explained that only certain part of Poti Port will be put at international stock exchanges. They did not elaborate how much and when.
“The company does not consider divesture of the control package at the moment, however I cannot say what happens in future, we will provide with details later,” Mamardashvili informed Georgian Journal. “Anyway the money attracted via this deal will be spent on Poti Port development actually.”
Mamardashvili assures that the interview of Massaad was wrongly interpreted by Georgian media and RAKIA does not plan complete divesture of Poti Port. 
Vera Kobalia, Minister of Economy of Georgia, believes  Poti Port was profitable to RAKIA and they are supposed to enjoy more profit via divesture of stocks at international market.
“RAKIA has full right to sell its stocks,” Kobalia said on November 4, 2010.
RAK Development that is a part of RAK Group entered Georgia in 2006 and is connected with Georgian government high tiers. It runs several projects including the real estate-related Uptown Tbilisi, a multifunctional complex aimed to construct a trade center as well as residential and office accommodations. The trade center is scheduled to be completed in spring of 2011 and the remainder part of the project by the end of 2012.
Rakeen Development took over the Mtatsminda Park [owned by the late Georgian business tycoon Badri Patarkatsishvili] under 49-year lease term in 2008. It is also an alleged owner of Imedi TV, owned by Patarkatsishvili family before the deceased tycoon clashed with Georgian government in fall of 2007.

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