Georgia’s Development Fund, the restructured successor to the former Partnership Fund, is selling 100% of its shares in the wine company Global Brand for 7.5 million GEL. The Fund established the company in 2017, investing the same amount into its creation. The company was originally founded to export Georgian wine to the United States.
Unlike other Partnership Fund projects, Global Brand was fully owned by the Fund. In most cases, the Fund participated in projects as a minority shareholder, but here it fully assumed the commercial and business risks. As part of the project, the wine brand Lost Eden was created.
The project was based on a business idea proposed by entrepreneur Levan Gachechiladze. In a 2020 journalistic investigation, Gachechiladze stated that although the state took on commercial risks for his project, its successful implementation would bring significant benefit to the country.
Until 2023, the chairman of the company’s Supervisory Board was Levan Mekhuzla, head of the National Wine Agency. In 2020, the then-CEO of the Partnership Fund, Davit Saganelidze, commented that if the company failed to achieve an 11% internal rate of return (IRR), the Fund would move forward with selling it.
“Levan Gachechiladze has the right to buy back this project, because he is the author of the idea. He was actively involved in the project and worked without any compensation. This project has an 11% IRR requirement. If this obligation is not met by the end of the year, we will have the right to put the company up for auction,” Saganelidze said in 2020.
According to the auction announcement for the asset sale, the Fund will provide Global Brand’s financial information to interested buyers only after they sign a confidentiality agreement.
