Turkey Aims to Close Energy Grid Privatizations in 2012

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Researched by Industrial Info Resources (Sugar Land, Texas)--After long falling behind targets, Turkey is trying to catch up in the privatization of its state-owned enterprises and energy distributors. Turkish Finance Minister Mehmet Simsek said recently that the government plans to close energy grid privatizations before the end of 2012. In a televised press conference in Ankara, he said that this year's privatization revenue will reach $3.7 billion, which will come below this year's target of $5.5 billion.

"We are planning to close Bogazici Elektrik Dagitim (BEDAS) and Gediz Elektrik Dagitim privatizations before year's end," the minister said. The companies have 4.1 million and 2.4 million subscribers, respectively.

On November 14, Turkey's Akdeniz Elektrik Dagitim, which has 1.6 million subscribers in the southern province of Turkey, attracted $546 million in privatization tenders. A consortium, Cengiz-Kolin-Limak, placed the highest bid of $546 million. For more information, see November 14, 2012, article - Turkey's Akdeniz Grid Attracts $546 Million Privatization Tender.

"We're planning to privatize the lignite powered plants first," Simsek said. "This can be done within a portfolio sale, as well as selling separately. The bidding process will be finished this Friday for the gas-fired power plant Hamitabat."

The Privatization Administration auctioned Hamitabat last year but cancelled the tender after receiving only one bid. The administration opened a tender in August 14, but delayed the auction date afterward. For additional information, see August 14, 2012, article - Turkey Opens Power Plant Privatization Tender.

"Also, the auction for Baskent Gaz will be held on December 17, in Ankara. There's a possibility of large institutional interest from Asian companies," Simsek said.

Baskent Gaz has 1.35 million subscribers and has the potential to attract 500,000 more, Ahmet Aksu, the acting chairman of the Privatization Administration (OIB), said in April 2012. The administration auctioned Baskent Gaz twice, but the winning bidders were not able to pay the offered amount. For additional information, see September 18, 2012, article - Turkey Invites Bidders for Ankara's Gas Grid Tender.

Halkbank SPO Results

He also added that the government raised $2.5 billion from secondary initial offering Halkbank (Ankara, Turkey). In line with the targeted allocation, 80% of the underlying shares are sold to foreign institutions. The sale is the biggest since Turkey began its privatization programme in the 1990s, much ahead of the $1.9 billion raised in the sale of Turk Telekom in 2008 and the $1.95 billion raised in the previous sale of 25% of Halkbank in 2007.

"This year's privatization income will be used to pay down government debt and to reduce borrowing needs," he said. "Currently, we're not planning to hold a block sale of Halkbank, but it may be a possibility over the long term."

In 2010, Turkey sold off the rights to operate nearly 20% of its power grids, raising more than $5 billion through tenders. Analysts recently forecasted that Turkish privatization volumes will reach $10 billion between 2013 and 2014.

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