Baskent Elektrik Dagitim AS (EDAS) (Baskent Electric Distribution Co.) may carry out a second bond issue next month, after the sale of 200 million Turkish liras' worth of bonds last week, according to Enerjisa’s CEO.
“The demand shown for our first bond sale is an indication of the consumer confidence in our company,” Enerjisa CEO Kivanc Zaimler told Anadolu Agency in an interview.
“More bond issues will help Turkey’s markets develop as well as support companies’ investments. We will continue the sale of bonds indexed to consumer price inflation depending on market conditions,” he added.
Baskent EDAS sold all of the offered three-year bonds indexed to consumer price inflation (CPI), mainly to pension funds, insurance and portfolio management companies and banks. This was the first sale of CPI-indexed bonds in Turkish capital markets by a private company, Murat Pinar, group director of distribution operations for Enerjisa said.
- Investments planned for electricity distribution network
Baskent EDAS is wholly-owned by Enerjisa, which has electricity generation, distribution, trading and sales as its main lines of business. Enerjisa is a joint venture between Dusseldorf-based energy giant E.ON and Sabanci Holding, Turkey’s largest conglomerate.
Pinar said revenues from the first bond sale will be directed to enhancing Baskent EDAS’s electricity distribution network and increasing its capacity.
“We also want to use the income generated towards research and development purposes and investing in distribution technologies,” Pinar told Anadolu Agency.
He said the extra income would also be used towards improving the call centers and developing smart network grids.
“It will also be a source of financial support for the company in terms of restructuring existing bank loans,” he added.
- Bond sales complement other sources of financing
Zaimler said bond sales by Turkish energy companies could currently only work to complement other sources of financing. With relatively low liquidity in the market and short maturities, the bonds could not qualify to be the only source of funding at the moment, he said.
“Turkish banks are strong enough to support the energy sector,” Zaimler said adding that “the recent refinancing and restructuring activity in the sector is proof of this.”
Aksa Energy, Turkey’s largest independent power producer, obtained a $800 million loan at the start of August, thus repaying a $400-million loan received in 2012. The company signed the loan agreement with a consortium of banks, including Garanti and Isbank, two of Turkey’s largest lenders.
Turkey’s Akenerji received a 12-year $1.1 billion loan late last year from Turkey’s Yapi Kredi Bank, a joint-venture between Turkey’s Koc Holding and Rome-based UniCredit SpA.
Akenerji, a joint venture between Turkey’s Akkok Holding and the Czech power company CEZ, specializes in power generation.
- Increased debt burdens
“The $1.1 billion refinancing loan enabled us to work comfortably,” Ahmet Umit Danisman, Akenerji CEO told Anadolu Agency in an interview last month.
“But we know for a fact energy firms which made large investments and have to repay their loans in foreign currencies are suffering,” Danisman said.
Turkey’s energy companies are estimated to have borrowed as much as $60 billion for power production and distribution investments worth nearly $75 billion.
The majority of private investors in Turkey are having to pay back the debt on their investments in foreign currencies, which has been increasing pressure on them, with the recent depreciation of the Turkish lira.
Zaimler said Enerjisa’s distribution and purchasing businesses could carry out more bond sales in the future to create more cash-flow. However, there were no bond sales planned by the energy group’s production units in the short-term, he added.
By Sibel Akbay
Anadolu Agency
sibel.akbay@aa.com.tr
