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PrivatBank Shares Reasons behind Selling the Rustavi Auto Market

The Ukrainian PrivatBank explains its decision to sell the Rustavi auto market. CBW was told at the bank that the Rustavi AUTOPAPA project does not represent a major business for PrivatBank and the asset is not related to the bank’s activities.

“PrivatBank is going to concentrate on its  own development in the EU and Ukraine. We are talking about  the banks in Cyprus and Latvia, as well as the branches in Portugal, Italy, and Germany,” – the Ukrainian bank representatives say.

According to them, when PrivatBank had its branch bank in Georgia, it used both projects — the bank and the auto market — in synergy. Now they are searching for a partner for equity participation which will get additional benefit from the AUTOPAPA project. In addition, if  PrivatBank is interested in the offer, a decision to sell off the project may be taken.

As we have reported earlier, after selling PrivatBank Georgia, the Ukrainian PrivatBank is selling the Rustavi auto market which has been put up for auction.

Specifically, a complete property complex included in the Rustavi auto market AUTOPAPA Georgia Group, including: 100% stake in Mikado Georgia Ltd (including the land and the buildings in it); 100% stake  in Rustavi auto market  Ltd (commercial projects, operating management of the market),  100% stake in Rustavi Terminal Plus Ltd.(operating management of customs control zone, a licensed manufacturer, custom terminal management); 100% stake in “Rustavi comfort Ltd (hotel operating management, along with  food  objects), as well as 100% of the management rights in  the portal autopapa.ge (e-automarket, the site, the server, the right to development and service contracts).

Late last year, Bank of Georgia announced the subsidiary acquisition of the Ukrainian PrivatBank. Bank of Georgia completed the purchase of the Georgian PrivatBank in February. The cost of the transaction amounted to $45.6 million. In December 2014, CBW was told at PrivatBank head office that at that stage the issue of selling the auto market was not discussed.

Igor Kolomoisky’s PrivatBank in Ukraine has problems – the Verkhovna Rada of Ukraine introduced a bill proposing to nationalize PrivatBank, but Ukrainian experts say that the government will not go to such measures, because jeopardizing the country’s largest financial institution may undermine Ukraine’s financial systems and its economy at large.