Hunnewell Partners holder Irakli Rukhadze says the sale of Liberty Bank to Basisbank will generate a tenfold return for the investment holding, ten times more than the amount originally invested. However, he did not disclose the transaction value during his interview on Sasha Katsman’s podcast.
Rukhadze noted that Hunnewell bought Liberty Bank roughly eight years ago, at a time when the bank was operating at a loss. Since then, Liberty’s performance has dramatically improved. “If we look at the cash-on-cash return today, the value has increased by about ten times. Because it’s a structured deal, we are receiving the payment in stages, but once we collect everything in full, it will be ten times our initial investment over eight years,” he said.
The investor also discussed the background of the Liberty sale and Hunnewell’s investment strategy, which centers on buying assets, improving them, and eventually selling them. He said Liberty fit their model because the bank either had to be generating $50 million in net profit, or Hunnewell needed a clear plan to bring it to that level within five years. Liberty ultimately reached that profit threshold.
Despite Liberty’s strong performance and a 20% return on equity, Rukhadze said that competing long-term with Georgia’s two dominant banks - Bank of Georgia and TBC - would be difficult. These large players would eventually enter the market niches where Liberty was growing, making either significant expansion or an exit necessary.
Rukhadze also disclosed why Raiffeisen Bank, which was hired to facilitate the sale, failed to find a major Western buyer. According to him, a large Western European bank was seriously considering acquiring Liberty—and even combining Basisbank as part of the deal. Basisbank was ready to accept shares instead of cash and merge with the new owner. This would have been one of the most significant banking transactions in Georgia.
However, Rukhadze said the deal collapsed due to Georgia’s political environment. The foreign bank’s leadership became concerned about the negative international media coverage of Georgia and feared potential reputational and regulatory risks. The representative leading the negotiations reportedly said that, despite seeing no real issues on the ground during visits to Georgia, they could not convince their supervisory board to approve an acquisition in a country perceived as politically unstable. “I’m a hired manager. I can’t take a deal like this to my board today. I might lose my job,” the banker told Rukhadze.
As a result, the Western buyer withdrew, leaving Basisbank as the only remaining bidder. The sale ultimately moved forward with Basisbank acquiring Liberty.
