“We already have signed agreements with JPMorgan and Merrill Lynch to place our Eurobonds on the market, but we cannot say when or what amount is being discussed,” the company’s director general, Irakli Ezugbaia, said in an interview in Tbilisi today. “We cannot talk about the details as it will raise expectations on the market.”

The company’s only outstanding bond is a 25 million lari ($13.2 million), 13.5 percent security due in 2011, Bloomberg data show. Prime Minister Nika Gilauri said on Feb. 24 the company may sell as much as $200 million of bonds. Ezughbaia declined to confirm the amount. He also couldn’t say whether the government may sell the company.

“The sale of Eurobonds will give the state-owned railway some financial support in order to modernize further,” David Narmania, executive director of the Caucasus Institute of Economic and Social Studies in Tbilisi, said by phone today. “There will be demand for sure, considering that investors are recovering worldwide.”

Former Prime Minister Lado Gurgenidze said today it would be a “positive step” for the country’s economy if the railway sells the bonds.

Georgian Railway, which is around 138 years old, links the Black sea with the Caspian sea.

Merrill Lynch is a unit of Bank of America Corp. JPMorgan Chase & Co and UBS managed government Eurobonds during Gurgenidze’s term of office. 

URL: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ahcCHg6sCztk