Tbilisi (GBC) - Ratings agency S&P today upgraded Georgia Capital PLC's (GCAP) credit rating to ''BB-'' with positive outlook from ''BB'' with stable outlook.
23% from March 2025 to March 2026 to GEL5.04 billion (about $1.87 billion). This growth was largely driven by a 43% rise in the value of Lion Finance Group, Georgia Capital’s largest and only listed holding, while the private portfolio value also grew by 18%. Portfolio rotation, such as the sale of the water utility business, also affected the performance of the private portfolio. In the first three months of 2026, the total portfolio value reduced by 0.6%, due to some contraction in Lion Finance Group’s share price, the recent divestment, and dividends paid. However, this was partially offset by robust performance in the private portfolio, which was up 3%.
Value creation was most pronounced in the retail (pharmacy) business (up 6.1%) and the insurance business (up 7.6%), while the emerging and other companies segment weighed on the overall portfolio value, as it did in 2025, which may lead to some divestments in the future. Over the three months, the net asset value (NAV) decreased by 0.8%, although S&P notes that it has increased by 33% since March 2025.
“We expect Georgia Capital to maintain low leverage, supported by continued disciplined debt management. As part of its GEL700 million capital return program, Georgia Capital had used GEL274 million as of April 2026 to redeem a portion of its outstanding bond (which equates to about $100 million of the total principal of $150 million). We expect to see continued use of cash or potential proceeds from the sale of smaller private assets for debt redemption in the near term, demonstrating the company’s commitment to deleveraging. Furthermore, the target NCC ratio of 10% over the cycle supports our view of the company’s disciplined approach to capital allocation.
According to the company’s policies, an NCC ratio of 10%-40% will trigger tactical share buybacks or investments, an NCC ratio of below 10% could generate more substantial share buybacks or investments, and an NCC ratio of above 40% would lead the company to preserve cash. As of March 31, 2026, the NCC ratio was 3.9%. A significant increase is not in our base case nor would we view it as commensurate with our rating. Although the ratio slightly increased from 2.3% in December 2025, due to a $50 million share buyback and cancellation program announced in February 2026, it is in line with allocation expectations. The company's NCC ratio includes planned investments, announced share buybacks, and a contingency/liquidity buffer.
Our adjusted LTV ratio for Georgia Capital as of March 31, 2026, was 0.4% (excluding future share buybacks or potential equity investments that are uncommitted). We think that the company could navigate relatively volatile market conditions that affect the valuation of its assets while maintaining an adjusted LTV ratio well below 10%”, the document reads.
One of the main limitations of S&P's assessment of Georgia Capital's business risk remains its high concentration in Georgia and significant reliance on a single listed asset, Lion Finance Group, which accounts for 47.2% of the total portfolio value and owns 16.6% of LFG itself.
According to S&P, the weighted average credit quality of the companies invested in by the group corresponds to the level of "B+".
