Tbilisi (GBC) – Georgia Capital PLC (GCAP) has announced the launch of a new GEL 1 billion capital allocation programme, which will begin following the completion of the company’s ongoing share buyback programme and is expected to be fully implemented by the end of 2029.
The programme will include both capital returns to shareholders - through share buybacks and, if required, dividends - as well as new investments in Georgia and Armenia. The first stage of the programme will be a US$50 million share buyback and cancellation initiative. The Board of Directors expects that at least half of the GEL 1 billion programme will be allocated towards returning capital to shareholders.
With regard to investment opportunities in Armenia, GCAP said it increasingly views Georgia and Armenia as similar growth markets, offering opportunities to invest in complementary businesses across both economies. The company is already participating in Armenia’s economic growth through Lion Finance Group’s investment in Ameriabank, as well as through the expansion of its retail pharmacy business, which currently operates 23 stores in the country.
Further announcements regarding new share buyback phases, potential acquisitions and other capital allocation initiatives will be made gradually as the programme progresses through the end of 2029.
The announcement of the new programme follows a significant strengthening of GCAP’s balance sheet. The company has fully eliminated HoldCo-level borrowing, meaning that after the completion of the current share buyback programme and repayment of existing liabilities, GCAP will have approximately GEL 310 million in available liquidity at the holding company level.
The Group also expects to generate strong free cash flow from its private portfolio companies, supported by growing dividend inflows driven by continued earnings growth. In addition, GCAP expects dividend income from its 14.9% stake in Lion Finance Group, which is expected to provide significant additional cash resources through the end of 2029.
Taking these factors into account, the Board has updated the company’s capital allocation policy. All new investment opportunities will continue to be assessed against the alternative of repurchasing GCAP shares and reinvesting capital into the existing portfolio.
However, as the discount between GCAP’s share price and its net asset value (NAV) per share has narrowed significantly in recent quarters, selective new investments have become increasingly attractive from a relative return perspective. According to the company, these opportunities provide an additional avenue for long-term growth while allowing GCAP to continue benefiting from the strong performance of its existing portfolio companies.
GCAP said that over the past three years, NAV per share has increased by approximately 34% annually on average, reflecting the significant value created by its portfolio companies.
