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MIRA INFORM REPORT
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Report No. : |
495829 |
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Report Date : |
13.03.2018 |
IDENTIFICATION DETAILS
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Name : |
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Registered Office : |
Kazreti
Bolnisi 1103 Kvemo Kartli Region |
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Country : |
Georgia |
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Date of Incorporation : |
31.01.1996 |
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Com. Reg. No.: |
23/5-2 |
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Legal Form : |
Joint stock company |
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Line of Business : |
Mining
and smelting of ore, copper and gold. |
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No. of Employees : |
2,000
(subject and RMG Gold ShPS) |
RATING & COMMENTS
(Mira Inform has adopted New Rating mechanism w.e.f. 23rd
January 2017)
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MIRA’s Rating : |
B |
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Credit Rating |
Explanation |
Rating Comments |
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B |
Medium Risk |
Business dealings permissible on a regular
monitoring basis |
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Maximum Credit Limit : |
LARI 10,000,000 |
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Status : |
Moderate |
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Payment Behaviour : |
No Complaints |
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Litigation : |
Clear |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List
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Country Name |
Previous Rating (30.09.2017) |
Current Rating (31.12.2017) |
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Georgia |
C1 |
C1 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low Risk |
A2 |
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Moderately Low Risk |
B1 |
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Moderate Risk |
B2 |
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Moderately High Risk |
C1 |
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High Risk |
C2 |
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Very High Risk |
D |
GEORGIA - ECONOMIC OVERVIEW
Georgia's main economic activities include cultivation of agricultural products such as grapes, citrus fruits, and hazelnuts; mining of manganese, copper, and gold; and producing alcoholic and nonalcoholic beverages, metals, machinery, and chemicals in small-scale industries. The country imports nearly all of its needed supplies of natural gas and oil products. It has sizeable hydropower capacity that now provides most of its electricity needs.
Georgia has overcome the chronic energy shortages and gas supply interruptions of the past by renovating hydropower plants and by increasingly relying on natural gas imports from Azerbaijan instead of from Russia. Construction of the Baku-Tbilisi-Ceyhan oil pipeline, the South Caucasus gas pipeline, and the Baku-Tbilisi-Kars railroad are part of a strategy to capitalize on Georgia's strategic location between Europe and Asia and develop its role as a transit hub for gas, oil, and other goods.
Georgia's economy sustained GDP growth of more than 10% in 2006-07, based on strong inflows of foreign investment and robust government spending. However, GDP growth slowed following the August 2008 conflict with Russia, and sunk to negative 4% in 2009 as foreign direct investment and workers' remittances declined in the wake of the global financial crisis. The economy rebounded in the period 2010-17, but FDI inflows, the engine of Georgian economic growth prior to the 2008 conflict, have not recovered fully. Unemployment remains persistently high.
The country is pinning its hopes for faster growth on a continued effort to build up infrastructure, enhance support for entrepreneurship, simplify regulations, and improve professional education, in order to attract foreign investment and boost employment, with a focus on transportation projects, hydropower, agriculture, and tourism. Georgia has historically suffered from a chronic failure to collect tax revenues; however, since 2004 the government has simplified the tax code, increased tax enforcement, and cracked down on petty corruption, leading to higher revenues. The government has received high marks from the World Bank for improvements in business transparency. Since 2012, the Georgian Dream-led government has continued the previous administration's low-regulation, low-tax, free market policies, while modestly increasing social spending, strengthening anti-trust policy, and amending the labor code to comply with International Labor Standards. In mid-2014, Georgia concluded an association agreement with the EU, paving the way to free trade and visa-free travel. In 2017, Georgia signed Free Trade Agreement (FTA) with China as part of Tbilisi’s efforts to diversify its economic ties. Georgia is seeking to develop its Black Sea ports to further facilitate East-West trade.
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Source
: CIA |
Company
name
RMG Copper SS (Correct)
JSC RMG COPPER (Requested)
ADDRESS
Street :
Dimitri Aleksidze Street 1, 3rd Lane
Area :
Isani-Samgori District
Town :
Tbilisi 0163
Country :
Georgia
Telephone : (995 32) 247 4545 / Mobile (995 591) 194 919 (Assistant
Executive Director) / (995 599) 176
611 (Corporate
Manager) / (995 595) 908 147 (Import Department)
Fax :
(995 32) 291 3861
E-Mail :
kmtchedlishvili@richmetalsgroup.com / tatabukia@mail.ru
Website :
www.richmetalsgroup.com
Extended Name : RMG Copper Saaktsio Sazogadoeba
English Translation : RMG Copper JSC
Formerly known as : Madneuli JSC
SENIOR
COMPANY PERSONNEL
Name Position
Supervisory
Board
1.
Dmitry Troitsky Chairman
2.
Dmitry Corjev Vice-Chairman
3.
Alvidas Brusokas Member of the
Board
Management
Board
1.
Jondo Shubitidze Executive
Director
2.
Kakhaber Mtchedlishvili Corporate
Manager
3.
Tata Bukia Assistant
Executive Director
Total
Employees : 2,000 (subject and RMG Gold ShPS)
PAYMENTS
No
complaints have been heard regarding payments from local suppliers or banks.
Subject
is a mining company based in Tbilisi, Georgia. Established in 1975, RMG Copper
is currently involved in ore, copper, and gold mining and smelting.
Subject
is a member of RMG Rich Metals Group of Companies, which is the largest group
in Georgia and Caucasus region, engaged in mining activities in Bolnisi region,
Georgia.
We
consider it is acceptable to deal with subject for LARGE amounts, although it
is normal accepted practice for international suppliers to deal on secured
terms with Georgian importers.
Opinion
on maximum credit : LARI 10,000,000
Trade
risk assessment: Normal
SIGNIFICANT CHANGES
A GEORGIAN
MINING ENTERPRISE HOPING TO START A SECOND MINING PROJECT IN IRAN BY 2018
2018 (www.madannameh.com): Iran Mines Group reports
about the upcoming mining project by RMG:
Reportedly, RMG (Rich Metals Group), a large mining
enterprise based in Tbilisi, Georgia is planning to start a second mining
project in Iran by 2018.
From a face-to-face interview with Mr. Troitsky
Dmitri and Alexander Tsaplin, it is inferred that RMG is currently involved in
a gold mining project in West Azerbaijan since it is blessed with copper and
gold mines and is clearly in alignment with their business objectives.
“Iran is a very open country and its rich mineral
reserves attracts the world,” Alexander Tsaplin says. He adds, “My partner, Mr.
Troitsky Dmitri and I look forward to embarking on more projects in the near
future and extending our business in different parts of Iran.”
Troitsky Dmitri mentions, “Iran government is very
open but we are not considering investing for now. Once the political situation
improves and reaches more stability, we will decide for investment into the
mining sector of the country.”
Alexander also points out, “We buy the mining
equipment and machinery from Iran local market. Yet, we need to invite experts
to cooperate accordingly. Moreover, this trade fair has been a good opportunity
for us to get to know reputable and professional corporations involved with the
mining industry internationally. “
PRINCIPAL BANKERS
NAME : BANK OF GEORGIA JSC
Branch : Gagarin Street 29A
Town : Tbilisi 0160
Telephone: (995 32) 244 4444
Fax : (995 32) 244 4444
FINANCIAL INFORMATION
Private
companies in Georgia are not required to publish or disclose balance sheets.
However, the subject interviewed offered
the following
information (latest available) :
Revenue : US DLRS 270,600,000 - 2015 – exact
: US DLRS 311,700,000 – 2016 – exact
Net
Profit : not given but stated to be profitable
Total
Invested Capital : LARI 30,000,000 – 2018/2023 – projected
New
Deposit Tetritsqaro
Financial
year ends 31 December.
The
following financial information applies to subject’s affiliated company, RMG
Gold ShPS (latest available) :
Revenue : US DLRS 681,100,000 – 2016 – exact
Net
Profit : not given but stated to be profitable
Financial
year ends 31 December.
LEGAL STATUS AND HISTORY
Date
Started : 31 January 1996
History
: The subject company was established in Bolnisi on 31 January 1996, however
its origins can be traced back to 1975. Initially, subject was registered under
the name Madneuli JSC. In 2005, GeoProMining purchased
Madneuli. This was one of the first public privatisations in Georgia. The
company was purchased by Stanton Equity, which at that time was part of the
Industrial Investors Holding. In 2007 Siman Povarenkin, who at that time was a
co-owner of Industrial Investors, purchased 100% of Stanton Equity and renamed
it GeoProMining. Later in 2005 GPM purchased another Georgian asset, Quartzite
(today known as RMG Gold), a producer of gold. On 14 June 2012 Rich Metals
Group acquired 100% ownership of JSC RMG Copper for US DLRS 120 Million. Under
the new ownership, the company previously known as Madneuli JSC changed its
name to the present style.
C.R.
No. : 23/5-2
ID
Code : 225358341
Capital
: not given
Saaktsio Sazogadoeba (joint stock
company) (SS) with the following sole shareholder :
Rich
Metals Group B.V. 100%
The
Netherlands
Ultimate
Parent Company
Capital
Group CJSC
Russia
Affiliated
companies of the subject company :
Associates
Subject
is a member of Rich Metals Group, which includes the following companies:
1. RMG
Gold ShPS
M. Aleksidze Street 1
Tbilisi 0160
Telephone: (995 32) 247 4545
Fax
: (995 32) 291 3861
Est.: 16 August 1995
ID Code: 225359947
Managing Director: Jondo Shubitidze
Shareholders:
- Rich Metals Group B.V. 96.21%
The Netherlands
- RMG Copper JSC 3.79%
2.
Kavkasiis Samto Jgupi ShPS
(aka Caucasian Mining Group LLC)
Merab Aleksidze Street 1/9
Vake-Saburtalo District
Tbilisi 0193
Mobile : (995 595) 908 147
(Office Manager)
E-Mail
: nkalichava@cmg.ge
Website
: www.cmg.ge
General Director: Jondo Shubitidze
Est.: 30 August 2011
ID Code : 404908775
Capital : LARI 1,600
Sole Shareholder:
- Pemtilon Holding Limited
Cyprus
C.R. No.: 288293
Personal
Profile on Dmitri Troitsky:
Dmitry Troitsky is a Russian businessperson and
co-owns O'KEY Group (retail chain) along with his partner Dmitry Korzhev. As of
per Forbes list 2011, he is the 1,140th richest person in the world and 94th
richest person in Russia. Troitsky has net worth of $1.0 billion. He is a first
generation entrepreneur and his wealth is self made.
Troitsky has obtained Bachelor of Arts &
Bachelor of Science degrees from Leningrad Shipbuilding Institute. His company
(O'KEY Group) was listed on London Stock Exchange in 2010 and the current
market capitalization is $3.0 billion.
Dmitry Troitsky & Dmitry Korzhev started
working together as students. Their first venture was car sales that lead to
formation of Mega-auto company in 1993. Mega-auto is now one of the biggest car
dealers in Saint Petersburg. In 1995 Dmitry Troitsky & Dmitry Korzhev founded
juice producing plant (Multon). Multon was sold to Coca-Cola after 10 years for
$500 million. In 2001 they both co-founded O-Key chain of supermarkets.
ACTIVITIES
The
Company is involved in the following activities :
Mining
and smelting of ore, copper and gold.
Subject
is contributing more than 10% of Georgian exports.
The mine was opened in 1975 in Bolnisi region,
Georgia. RMG Copper has the open pit Bolnisi Mine in the Bolnisi district of
the Kvemo Kartli region in southern Georgia. The mine reached full capacity in
1978. Western sources estimate RMG Copper's assets in this mine to be 350,435
oz (10,908 kg) of gold. Silver, copper, and other minerals are also mined at
that location. This asset has been worked for 30 years.
NACE
code: 0710
Imports
from Europe.
Exports
to Europe.
Subject’s
principal buyer is Trafigura Pte Ltd (Singapore).
FACILITIES
The
Company has the following facilities :
Owned
premises comprising administrative offices located at the heading address as
well as a branch office located elsewhere in Georgia (see 'Branch Offices'
below).
REGISTERED OFFICE
Kazreti
Bolnisi
1103
Kvemo
Kartli Region
BRANCH OFFICES
Kazreti
Bolnisi
1103
Kvemo
Kartli Region
SPECIAL NOTE
You enquired
on: JSC RMG COPPER. Please note that the correct name is as per heading.
Interviewed:
Kakhaber Mtchedlishvili (Corporate Manager).
FOREIGN EXCHANGE RATES
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
INR 65.02 |
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1 |
INR 90.12 |
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Euro |
1 |
INR 80.09 |
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GEL |
1 |
INR 26.71 |
Note :
Above are approximate rates obtained from sources believed to be correct
INFORMATION DETAILS
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Analysis Done by
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PRI |
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Report Prepared
by : |
TRU |
RATING EXPLANATIONS
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Credit Rating |
Explanation |
Rating Comments |
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A++ |
Minimum Risk |
Business dealings permissible with minimum
risk of default |
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A+ |
Low Risk |
Business dealings permissible with low
risk of default |
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A |
Acceptable Risk |
Business dealings permissible with
moderate risk of default |
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B |
Medium Risk |
Business dealings permissible on a regular
monitoring basis |
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C |
Medium High Risk |
Business dealings permissible preferably
on secured basis |
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D |
High Risk |
Business dealing not recommended or on
secured terms only |
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NB |
New Business |
No recommendation can be done due to
business in infancy stage |
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NT |
No Trace |
No recommendation can be done as the
business is not traceable |
NB is stated where there is insufficient information to facilitate rating. However, it is not to be considered as unfavourable.
This score serves as a reference to assess
SC’s credit risk and to set the amount of credit to be extended. It is
calculated from a composite of weighted scores obtained from each of the major
sections of this report. The assessed factors are as follows:
·
Financial
condition covering various ratios
·
Company
background and operations size
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Promoters
/ Management background
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Payment
record
·
Litigation
against the subject
·
Industry
scenario / competitor analysis
·
Supplier
/ Customer / Banker review (wherever available)
This report is issued at
your request without any risk and responsibility on the part of MIRA INFORM
PRIVATE LIMITED (MIPL) or its officials.