Georgian gov’t gets 7.73% stake in Borjomi company to address issues sparked by sanctioned Russian oligarch

IDS Borjomi International will  transfer a 7.73% stake to the Georgian government free of charge for the latter to resolve complications in the company which were sparked by sanctioning its key owner, a Russian oligarch, due to his country’s invasion of Ukraine. 

“On June 13, 2022, after the official acceptance of the offer by the Government of Georgia, the controlling shareholder of IDS Borjomi International will transfer the 7.73% share of the company to the Government of Georgia free of charge,” said the company on Monday. 

As a result of the agreement:

The controlling shareholder will no longer have the controlling function of IDS Borjomi International.

The shareholder representation on the Board of Directors of IDS Borjomi International will be reduced from eight to two members.

The Chairman of the Board of Directors of IDS Borjomi International will be a representative of the Government of Georgia.

“The shareholders of IDS Borjomi International, constantly cared about the success of the company in each country or market. We, IDS Borjomi, are grateful to the Government of Georgia for supporting this agreement. In this difficult situation, this decision allows the company to continue its long-term development,” said Elkhan Alnazarov, a member of the Board of Directors of IDS Borjomi International.

PM Irakli Garibashvili said today that the negotiations are over and the Georgian government would receive Borjomi shares free of charge.

“Our state will become the co-owner of the Borjomi company, our national wealth and pride,” Garibashvili noted.

He suggested that the deal was made “ in full compliance with the norms of international law.” 

Borjomi’s controlling stake has been owned by Alfa Group since 2013, the founder of which is a sanctioned Russian billionaire, businessman Mikhail Fridman. 

 

Both bottling plants at Borjomi have been suspended since April 29 due to sanctions imposed on Russia.

 

The strike by the company workers began on May 31. Their demands are as follows:

 

Immediate reinstatement of 50 dismissed individuals.

 

Return to old contracts and increase in  salaries by 25%. As well as dismissal of individuals observed in coercion, pressure and blackmail. 

 

Transition from term contracts to perpetual contracts.

 

Concluding a collective agreement.