Turkey's Bereket Is Said to Begin Sales to Pay $4 Billion Debt

(Bloomberg) -- Turkey’s Bereket Enerji group has put power plants on sale as part of plans to refinance and pay down its debts, joining other Turkish power companies that are renegotiating their foreign-currency loans with lenders, seven people with knowledge of the plan said.

Bereket, based in Turkey’s western Denizli province, hired Istanbul-based Yapi Kredi Yatirim Degerler AS to sell its cascaded Goktas I and Goktas II hydroelectric power plants, which have a combined 275 megawatts of capacity on the Seyhan river in Turkey’s south, said the people, who asked not to be named because the deal isn’t public. There are several local suitors for the plants, the people said. Bereket is seeking to earn at least $400 million from the sales, said two of the people.

Bereket has a total power-plant capacity of 2,100 megawatts, including 750 megawatts in renewable power as well as coal-fired units. The company is also in discussion with local banks on its loan portfolio of around $4 billion, which has become more challenging to repay amid a plunge in the nation’s currency.

Turkey’s banks are facing a tidal wave of debt-restructuring requests, including from power producers, amid the lira’s depreciation and rising borrowing costs. Requests by some of the country’s biggest businesses, from the owner of Turk Telekom to global chocolatier and biscuit-maker Yildiz Holding, already total almost $20 billion of loans.

Third Biggest

Bereket’s debt load is the third-biggest among companies that have so far requested restructuring, according to data compiled by Bloomberg. Turkey’s non-bank foreign-currency debt is equal to about 40 percent of economic output.

Yapi Kredi Bankasi AS has the biggest exposure to Bereket Enerji loans, two of the people said. Bereket, Yapi Kredi Bank and Yapi Kredi Yatirim declined to comment.

State-run Turkiye Vakiflar Bankasi AO and private Turkiye Is Bankasi AS were among six banks that lent the group $700 million in long-term loans last year, Bereket Enerji group Chairman Ceyhan Saldanli said in an interview on Feb. 12. The group’s outstanding borrowings were $3 billion at the time, with maturities longer than 10 years and annual repayments of $250 million, within the group’s ability to repay, he then said.

Bereket also serves 5 million consumers through power distribution grids in Aydin, Denizli and Mugla provinces, and in Izmir and the Manisa region, according to its website. It also operates solar power plants and manufactures aluminum and copper products.

Established in 1995, Bereket bought Yatagan power plant assets and operating rights from the government in 2014 for $1.1 billion through its unit Elsan. It previously purchased the Izmir-Manisa power grid for $1.23 billion in 2013. The company received a 12-year, $1.54 billion loan from Turkiye Garanti Bankasi AS, Isbank, TSKB, Yapi Kredi and Vakifbank for acquisition of the Izmir grid, according to data compiled by Bloomberg.

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