Turkey’s Sabancı says to sell stake in Enerjisa businesses before IPO

ISTANBUL - Reuters

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Turkey’s Sabancı Holding plans to sell a minority stake in the electricity distribution and energy retail businesses of its Enerjisa subsidiary to cut debt ahead of Enerjisa’s initial public offering, a senior executive said on April 5.

Sabancı, one of Turkey’s largest conglomerates, expects to float Enerjisa as early as the end of next year, Mehmet Göçmen told reporters in Istanbul. 

Sabancı has repeatedly postponed the IPO, saying it needs to reduce the unit’s debt. Enerjisa is half owned by German utility E.ON.

“To sell a minority stake in our distribution and retail businesses is on our agenda. It will help reduce our debt and also help the IPO,” Göçmen said.

“We are planning to do the IPO at the end of 2017 or the beginning of 2018. We don’t want to delay it further. It is not yet clear how much of a stake we will float.”

Enerjisa’s business covers electricity generation, distribution, trading and sales and it also manages a natural gas portfolio. Its total debt stands at 12 billion lira ($4.2 billion), almost half of that is euro denominated, Göçmen said.

Helped by government incentives, the Turkish power industry has expanded its generating capacity to 70,000 MW (70 gigawatts), which far outstrips demand and is driving down prices. That has prompted some companies to reconsider their holdings in the industry.

Enerjisa operates electricity distribution and retailing businesses in three regions of Turkey. It expects to increase sales this year by 8 percent, from around $4 billion last year, Göçmen said.

Enerjisa’s earning before interest, taxes, depreciation, and amortization is likely to rise by 40-50 percent this year, from $1.8 billion last year, he said.