Societe Generale enters in negotiation to sell a majority stake in its georgian subsidiary Bank Republic
Societe Generale Group entered into a preliminary agreement with the Chinese Xinjiang Hualing Trade and Industry (Group) Co., Ltd. (Hualing Group), and the European Bank for Reconstruction and Development (EBRD), for the sale of its majority stake in Bank Republic, its Georgian subsidiary.
Hualing Group, a large private conglomerate based in Xinjiang, China and one of the major foreign investors in Georgia, operates in various fields. It also owns a banking subsidiary in Georgia, Basis bank and other financial assets in China.
This transaction would help Hualing Group to strengthen its banking arm in Georgia and in the Group's business portfolio. Indeed, according to the transaction terms, Hualing Group would merge Bank Republic with its banking entity Basis Bank to create a universal bank that would be firmly anchored as the n°3 player in the market with notably about 2.5 billion GEL in total assets, 250,000 clients, 61 branches and some 1,300 staff.
After the merger, Societe Generale Group would own approximately 8% of the shares in the new combined entity and remain a member of the Supervisory Board. This operation would have a very limited impact on the Group’s ratios.
EBRD would also hold a minority stake of approximately 3.9% in the new combined entity and remain a member of the Supervisory Board as well as a committed financing partner for the Georgian banking market.
This transaction is notably subject to Georgian regulatory approvals and registration with relevant Chinese authorities.