Debt-Ridden Group Readies for Turkey’s Biggest IPO in Years

Aydem Holding AS is gearing up for an initial public offering of its renewable-electricity producer next quarter that could value the unit at as much as $1.5 billion, according to people with knowledge of the matter.

The re-branded company formerly known as Bereket Enerji, which last year underwent Turkey’s second-largest debt restructuring, revived plans to sell shares in Aydem Yenilenebilir Enerji AS, said the people, who asked not to be named because the information is confidential. The IPO is happening a year later than first anticipated after the coronavirus outbreak deterred investors.

Aydem Holding is expecting to raise around $300 million, they said. The IPO in Istanbul will be open to international and domestic investors, and will be based off the company’s Sept. 30 financial statements, said the people. Proceeds from the IPO will be used to repay debt incurred for investments made by the renewable power company, they said.

If the IPO materializes, it will be the biggest share offering in Turkey since discount grocer Sok Marketler Ticaret AS raised $595 million in mid-2017.

Debt-Ridden Group Readies for Turkey’s Biggest IPO in Years

Borsa Istanbul has had only $57.3 million worth of IPOs this year, $40.7 million in all of 2019 and $27.3 million in 2018, compared with $1.83 billion in 2017, according to data compiled by Bloomberg. Borsa Istanbul’s benchmark BIST 100 Index rose 3.1% this year, while MSCI Emerging Markets Index gained 4.4% during the same period.

Debt Overhauls

Listings have all but dried up amid a period of higher interest rates, currency instability and a downturn in the economy, which forced local companies to try and restructure debt.

In one such overhaul, Aydem Holding agreed with lenders to extend maturities on about $5 billion of loans. It’s now in talks with lenders for lower rates on borrowings that had previously been restructured, people with knowledge of the matter said last month.

The decision to proceed with the IPO would depend on the market’s appetite in the first quarter of 2021, according to the people. Denizli-based Aydem Holding, owned by businessman Ceyhan Saldanli, declined to comment.

Aydem Holding has already signed up Goldman Sachs Group Inc., JPMorgan Chase & Co. and Citigroup Inc. as global lead bookrunners, alongside four Turkish investment banks to organize the sale at home, people familiar with the plans said in late 2019.

Aydem Yenilenebilir has 25 power plants with a total capacity of more than 1,000 megawatts, according to its website. Aydem Holding also owns coal-fired power plants and energy distribution networks.

Renewable energy operators in Turkey get tariff guarantees by the government for all power that they produce. These guarantees, which ensure that the state covers the cost of electricity generated at dollar-based prices, make it easier for investors to predict revenue for the producers.

©2020 Bloomberg L.P.

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