Astaldi and Partners Weigh Sale of $7 Billion Turkish Road

(Bloomberg) -- Astaldi SpA, the cash-strapped Italian builder, and its Turkish partners are looking into the possible sale of their Istanbul-Izmir toll road. The company’s shares rose on the news.

The joint venture that’s building the highway asked international banks to bid for the right to advise them on the future of the road, said Kerim Kemahli, chief financial officer of Nurol Holding AS, which holds a 27 percent stake in the partnership. Astaldi, which is a junior partner with 18 percent, is looking to sell assets wherever possible to raise money.

The options may include an outright sale of the venture known as Otoyol Yatirim ve Isletme AS, or a partial stake sale, Kemahli said in a phone interview. The project will have cost $7 billion, he said.

“Our aim is to find what options we have on the asset and to determine if there is interest in the asset,” Kemahli said on Monday. “We plan to complete the selection of international advisers in two to three months.”

Astaldi, Italy’s second-biggest builder, has been hit hard by a crisis in that country’s construction sector and entered special administration after a re-capitalization plan failed. Shares rose as much as 13.4 percent to 67.8 euro cents in Milan, the highest since Oct. 10.

More: Debt Crisis in Italy’s Building Sector to Claim Another Victim

Builders Mak-Yol Insaat and Ozaltin Insaat each have 27 percent stakes in the JV, while Gocay Insaat has less than 1 percent, according to Kemahli.

Members of the Otoyol JV won the right to operate the 400-kilometer (250-mile) road and a suspension bridge for 22 years and four months in 2009. The joint venture could sell a stake in the company, therefore transferring the operational rights to the new investor. They borrowed almost $5 billion in 2015, with a total of nine lenders including Deutsche Bank AG, Akbank TAS and Turkiye Is Bankasi AS each chipping in around $550 million to finance the project.

Yavuz Batum, Otoyol’s chief executive officer, confirmed on Tuesday that the joint venture started the process to select an adviser to assess the value of the asset and potential buyers.

The Turkish government compensates for any traffic less than 40,000 vehicles a day on the three-kilometer suspension bridge, according to the terms of the contract. An average of 25,000 vehicles used the bridge in 2018, Kemahli said, adding that he expects traffic to grow 20 percent a year.

--With assistance from Antonio Vanuzzo.

To contact the reporters on this story: Ercan Ersoy in Istanbul at eersoy@bloomberg.net;Kerim Karakaya in Istanbul at kkarakaya2@bloomberg.net;Chiara Albanese in Rome at calbanese10@bloomberg.net

To contact the editors responsible for this story: Onur Ant at oant@bloomberg.net, ;Stefania Bianchi at sbianchi10@bloomberg.net, Paul Armstrong

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