Turkey’s energy giant sells power plants to pay down debt

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Göktaş 2 Hydroelectric Power Plant

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

Bereket, based in Turkey’s western Denizli province, hired İstanbul-based Yapı Kredi Yatırım Değerler AŞ to sell its cascaded Göktaş I and Göktaş 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 is not 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 discussions 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 Türk Telekom to global chocolatier and biscuit-maker Yıldız Holding, already total almost $20 billion of loans.

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.

Yapı Kredi Bankası AŞ has the biggest exposure to Bereket Enerji loans, two of the people said. Bereket, Yapı Kredi Bank and Yapı Kredi Yatırım all declined to comment.

State-run Türkiye Vakıflar Bankası AO and private Türkiye İş Bankası AŞ were among six banks that lent the group $700 million in long-term loans last year, Bereket Enerji group Chairman Ceyhan Saldanlı 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 Aydın, Denizli and Muğla 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 Yatağan power plant assets and operating rights from the government in 2014 for $1.1 billion through its unit Elsan. It previously purchased the İzmir-Manisa power grid for $1.23 billion in 2013. The company received a 12-year, $1.54 billion loan from Türkiye Garanti Bankası AŞ, İşbank, TSKB, Yapı Kredi and Vakıfbank for acquisition of the İzmir grid, according to data compiled by Bloomberg.

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