09TBILISI392, INFORMATION ON IBERIA REAL ESTATE

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Reference ID Created Released Classification Origin
09TBILISI392 2009-02-27 05:08 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Tbilisi

VZCZCXRO4122
RR RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHNP RUEHPOD RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHSI #0392 0580508
ZNR UUUUU ZZH
R 270508Z FEB 09
FM AMEMBASSY TBILISI
TO RUEHC/SECSTATE WASHDC 1072
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS TBILISI 000392 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EUR/CARC, EEB 
 
E.O. 12958: N/A 
TAGS: EINV EFIN GG
SUBJECT: INFORMATION ON IBERIA REAL ESTATE 
 
REF:  STATE 15786 
 
1. Summary: In response to reftel, Post's inquiries into Iberia Real 
Estate (Iberia) and its umbrella company JSC Iberia Group revealed 
no negative information that would preclude OPIC financing.  End 
Summary. 
 
2. Iberia enjoys a strong reputation in Georgia's business arena. 
Iberia is a diversified company; its branches operate in 
construction and real estate development, and food and beverage 
manufacturing.  Iberia was an exclusive dealer of Peugeot in 
Georgia, but has recently sol its automobile import business. 
 
3. Iberia has substantial foreign investment.  On the construction 
side, its main shareholder is Firebird Aurora Fund.  On the food and 
beverage side, EBRD holds 30 percent of Iberia's shares. 
 
4. Post is unaware of the failure of any of Iberia's construction 
projects.  On the contrary, the company is known for its high 
quality performance.  This view was confirmed by a competitor 
company (CID Architecture). 
 
5. The owners of Iberia have a good reputation, and Post is unaware 
of any negative information concerning involvement in corruption, 
money laundering or any other violation of the law.  The only 
controversial figure amongst Iberia's shareholders (more 
specifically, Iberia Refreshments) was Khibar Khalvashi, a close 
ally of Georgia's former Defense Minister, Irakli Okruashvili, who 
is currently living in exile.  However, Khalvashi sold his shares 
shortly after Okruashvili's political scandals unfolded in 2007. 
Ramaz Mosiashvili, chairman of the supervisory board, is a key 
figure in the company and is said to be a highly competent 
businessman surrounded by professionals. 
 
6. Post notes that the situation in Georgia's construction sector 
has deteriorated considerably due to the combined effect of 2008 
August War and the world economic crisis.  Since August, mortgage 
lending has declined by nearly half, respective interest rates have 
increased from four to six percent, and collateral requirements have 
been tightened.  Prices on real estate have dropped, reportedly by 
20 percent and are expected to decline further in the near future 
(Embassy Note: Accordingly, companies might be forced to recalculate 
projections on sales revenues.  End Note).  One benefit of the world 
economic crisis on Georgia's construction sector has been a 
reduction in the prices of construction materials, mainly imported 
from Turkey and Ukraine.  After a short stagnation, the sector has 
started picking up, although slowly. 
TEFFT

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