Enerjisa Gives Highest Bids for Toroslar and Ayedas Grid at $3 Billion Total

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Researched by Industrial Info Resources (Sugar Land, Texas)--Turkish conglomerate Haci Omer Sabanci Holding's (Istanbul, Turkey) energy company, Enerjisa (Istanbul), submitted the winning bid for the Toroslar and Ayedas electricity distribution regions. Turkey's second-biggest non-state energy producer, Enerjisa, which is a joint venture between Sabanci and Germany's E.ON (Dusseldorf, Germany), will pay a total of $3 billion for the operational rights of two electricity distribution regions, Toroslar and Ayedas.

The company will pay $1.73 billion for the Toroslar electricity distribution region, including Adana, Gaziantep, Hatay and Mersin. Currently, Toroslar has 2.8 million electricity subscribers.

For Ayedas, which operates in the Istanbul Anatolia region with 2.4 million subscribers, Sabanci Holding will pay $1.23 billion. "We will give our expertise, which we have earned from Baskent Elektrik since 2008, to these power grids," Enerjisa Chairman Selahattin Hakman said after privatization tender held in Ankara. "We'll pay the amount with instalment plan."

For additional information in Sabanci's plans in the energy sector, see February 13, 2013, article - Sabanci Holding Plans $1.61 Billion in Energy Investments in 2013.

"The acquisition of two distribution regions is positive for the long-term prospects of Enerjisa, as the company will have access to end-user customers," said Kazim Andac, an analyst at Deutsche Bank in Istanbul. "Given its presence in regions with its generation fleet, Enerjisa will benefit from higher pricing for end-user customers, which will have a positive impact on its profitability."

The Turkish Competition Board allowed Verbund AG (OP:OEZVY) (Vienna, Austria) to perform an asset swap with E.ON in Enerjisa (Istanbul, Turkey), the 50:50 joint venture with Sabanci Holding, on January 29. For additional information, see January 29, 2013, article - Turkey Clears E.ON-Verbund Asset Swap in Enerjisa.

Other Tenders

: The Privatisation Administration (PA) also held two other tenders for electricity grids, to finalize the privatisation of grids. Vangolu Elektrik Dagitim, which distributes electricity to Bitlis, Hakkari, Mus and Van in eastern Turkey, got the highest bid of $118 million from Ankara-based construction firm Turkerler Insaat. Vangolu has a loss-theft ratio of 52.1% and has 458,000 subscribers.

For Dicle Elektrik Dagitim, (Diyarbakir, Mardin, Siirt, Sanliurfa, Batman and Sirnak), a consortium led by Ankara-based construction firm Iskaya Dogu, gave the highest bid of $387 million for operating rights. Dicle Elektrik has the highest loss-theft ratio of 71.4% and has 1.2 million subscribers.

Turkerler and Iskaya Dogu will pay the amount with installment plans, as both companies began talks with banks to have credit lines to finance grids.

Mahmut Unlu, the main shareholder of the Unlu&Co investment bank, predicts deals targeting Turkey at between $25 billion and $30 billion this year, compared with as much as $33 billion in 2012. The figures include an estimated $10 billion of government sales in 2013, down from $14 billion last year, Unlu said in a press conference in Istanbul on February 12.

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