Was Imedi Sold or Just Burdened? Roman Gotsiridze on the 450 Million Debt and the 1,000 Lari Sale

The sale of the television company "Imedi" for a mere 1,000 GEL has raised significant concerns about the company's financial health, leading critics to suggest that its true value is effectively zero due to substantial debts exceeding 450 million GEL. Opposition politician Roman Gotsiridze emphasized that the sale does not indicate a successful transaction but rather a burden passed onto new owners.

Last updated: 26 October 2023 (BST)

What’s happening now

The recent sale of "Imedi" has sparked heated discussions in Georgian political and business circles. The transaction, which involved the transfer of ownership for just 1,000 GEL, has been interpreted by many, including Gotsiridze, as a sign of the company's precarious financial situation. This sale is seen as a way for the previous owners to absolve themselves of a hefty debt burden while leaving the new owners with the responsibility of managing the company’s liabilities.

Key takeaways

• The sale price of 1,000 GEL suggests severe financial distress within "Imedi".
• Roman Gotsiridze claims the company has debts exceeding 450 million GEL.
• The new ownership structure raises questions about the management of these debts.

Timeline: how we got here

Since its establishment, "Imedi" has faced various challenges. Here’s a brief timeline highlighting key events leading to the recent sale:

• 2001: "Imedi" is founded, quickly becoming a prominent media outlet in Georgia.
• 2010: The company faces significant financial difficulties, leading to changes in ownership.
• October 2023: "Imedi" is sold for 1,000 GEL amid reports of debts exceeding 450 million GEL.

What’s new vs what’s known

New today/this week

The announcement of the sale has revealed the astonishingly low price, prompting questions about the company's operational viability and future prospects. Notably, Gotsiridze has highlighted the role of significant debts in this situation, casting doubt on the sustainability of the new ownership.

What was already established

Previously, it was known that "Imedi" was struggling financially, but the specific extent of its debts and the implications of a sale at such a low price were not fully understood until now. The involvement of prominent businessman Irakli Rukhadze suggests deeper ties to influential financial backers.

Impact for the UK

Consumers and households

While primarily a Georgian issue, the situation at "Imedi" may affect the broader media landscape, including news access and diversity of viewpoints for Georgian expatriates in the UK. Financial instability in media companies can lead to reduced programming quality and fewer local news options.

Businesses and jobs

The sale could have ramifications for employment within "Imedi" and the wider media industry, particularly if the new ownership cannot stabilise the company's finances. This might result in job losses or shifts in advertising strategies impacting local businesses reliant on media coverage.

Policy and regulation

The sale of "Imedi" could attract scrutiny from regulatory bodies in Georgia, particularly concerning media ownership concentration and the potential influence of political figures like Bidzina Ivanishvili. Regulatory responses may shape the future landscape of media ownership in Georgia.

Numbers that matter

• 1,000 GEL: The reported sale price of "Imedi".
• 450 million GEL: Estimated debts of "Imedi".
• 67 million GEL: Projected loss for "Imedi" in 2024 according to audit reports.
• 50 million GEL: Annual losses that may need financing by the new owners.

Definitions and jargon buster

• GEL: Georgian Lari, the currency of Georgia.
• Imedi: A prominent Georgian television company.
• Debt burden: The total amount of money that an individual or entity owes.

How to think about the next steps

Near term (0–4 weeks)

Observers should monitor the new ownership's actions regarding immediate financial decisions and operational changes within "Imedi". There may also be public statements from the new owners regarding their vision for the company.

Medium term (1–6 months)

As the new management settles in, it will be crucial to track financial reports and any restructuring plans that may be implemented to address the significant debt burden. Potential partnerships or advertising strategies will also be important indicators of the company's direction.

Signals to watch

• Financial statements from "Imedi" revealing performance metrics.
• Public announcements regarding strategic changes or partnerships.
• Regulatory responses to the sale and its implications for media ownership in Georgia.

Practical guidance

Do

• Stay informed about developments in the ownership and management of "Imedi".
• Understand the potential implications for media diversity in Georgia.

Don’t

• Assume that the low sale price indicates an opportunity for investment without understanding the underlying financial issues.
• Neglect the importance of regulatory changes that may arise from this transaction.

Checklist

• Review recent news articles for updates on "Imedi".
• Monitor financial reports from the new ownership.
• Consider the impact of media consolidation on local journalism.

Risks, caveats, and uncertainties

It is essential to acknowledge the precarious nature of "Imedi's" financial situation. The sale's implications may not be clear for some time, and the actual performance of the new ownership could vary significantly. Additionally, the involvement of politically influential figures raises concerns about transparency and the potential for conflicts of interest.

Bottom line

The sale of "Imedi" for a nominal fee highlights severe financial distress, raising questions about the future of the company and the media landscape in Georgia. Stakeholders should remain vigilant as the situation evolves and consider the broader implications for media integrity and accountability.

FAQs

What does the sale of "Imedi" signify for its financial health?

The sale of "Imedi" for 1,000 GEL indicates significant financial distress, with debts reportedly over 450 million GEL, leading to concerns about the company's viability.

Who are the new owners of "Imedi"?

The new ownership includes "Prime Media Global", which is set to acquire 50% of "Imedi", with the remaining share held by the general director and her four deputies.

What are the potential impacts of this sale on employment at "Imedi"?

The sale could lead to changes in employment levels depending on the new management's strategies for addressing the company's financial challenges and operational efficiency.