Turkey's Baskent Gaz Grid Sold to Torunlar for $1.16 Billion

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Researched by Industrial Info Resources (Sugar Land, Texas)--Turkey's Privatization Authority has sold the natural gas distributor Baskent Dogalgaz Dagitim AS - Baskent Gaz (Ankara, Turkey), the second-largest natural gas grid company after Istanbul's IGDAS. Torunlar Gida (Istanbul, Turkey), which has interests in construction, real estate and agriculture businesses, gave the highest bid of $1.16 billion. The company participated in all electricity grid privatization auctions but couldn't get any of them.

Baskent Gaz has 1.4 million subscribers and 2.3 billion cubic meters of annual consumption. The gas distribution license of the company is valid until 2037. The parties that submitted bids were: Eksim Yatirim Holding-Genpa Telekom-MKS Marmara Entegre Kimya Sanayii; Fernas Insaat; Torunlar Gida; Turkerler Insaat-Gama Holding; Zorlu Holding; and Akfen Holding- STFA Yatirim Holding.

According to privatization tender documents, Torunlar will use the same tariff for an eight-year period after the handover process ends.

"We'll renovate the company step by step after the acquisition. We may get a partner for Baskent Gaz," said Torunlar Gida Chairman Mehmet Torun after the privatization tender. "It's not a necessity, but if a good opportunity occurs, we'll get a partner to create a synergy for the company, and also the Turkish economy."

"We're not planning to increase tariffs for natural gas. In the end, the natural gas is an imported commodity, which also depends on foreign exchange."

The first tender was opened in March 2008 by the Ankara Municipality. The highest bid, $1.6 billion, was given by Global Yatýrým Energaz, followed by Elektromed. Both companies failed to meet the sale obligations, resulting in the cancelation of the tender. Then the Privatization Authority decided to sell 80% of the grid. MMEKA, a joint venture of businessmen Mehmet Emin Karamehmet and Mehmet Kazancý, gave the highest bid with $1.2 billion for 80% of the grid in a tender in 2010. But the sale failed again, this time due to disputes that arose between the partners of MMEKA.

The third tender was opened in April 2012. Four bidders were interested in the privatization auction, but the bidders did not meet the government's initial price of $626 million. For additional information on Baskent Gaz, see April 30, 2012, article - Turkey Fails to Privatize Natural Gas Distributor Baskent Dogalgaz.

The Turkish government privatized the large number of electricity grid companies through tenders. In early January, Turkish Finance Minister Mehmet Simsek said that the $2.4 billion income from privatization tenders was transferred to the Turkish Treasury. "This number is higher than the privatization income targets for 2013, which was settled at $2 billion for the year as a whole," Simsek said in a speech in Turkish Parliament on January 3.

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