E.ON, Sabanci Hire Citi, JPM for Power Producer IPO

(Bloomberg) -- German energy company E.ON SE and Turkish conglomerate Haci Omer Sabanci Holding AS have hired advisers to work on a possible initial public offering of their electricity producing joint venture, people with knowledge of the plans said. 

Enerjisa Uretim Santralleri AS, as the equally owned entity is called, agreed with Citigroup Inc., JPMorgan Chase & Co. and Morgan Stanley to manage the share sale, which is planned for next spring, the people said, asking not to be named as the deliberations are confidential.

There could be more international and local advisers added down the line, they said. The plans may or may not result in an actual share sale and will depend on the appetite of international investors, who are the main target group, the people said. 

Sabanci Holding shares reversed losses and rose as much as 2.7% in Istanbul after the news while the benchmark index was down 0.4% as of 4:08 p.m. 

“The stock is reacting positively to IPO plans for Enerjisa Uretim,” said Burak Demircioglu, head of institutional sales at Yatirim Finansman. “This IPO would favor Sabanci Holding the most.”

Enerjisa Uretim has 3,800 MW of installed capacity from power plants running on renewables, oil and gas, making it the second largest private producer in Turkey after Enka Insaat, according research from Kearney and Enerji Gunlugu.

The company plans to add more capacity to over 5,000 MW in 2027, according to its website. Apart from this target, it also has pre-license for another 500 MW project to produce renewable energy with a storage facility.

For more, read: Enerjisa Uretim Eyes Foreign Investor Interest for Possible IPO

Sabanci, Citigroup, E.ON, Morgan Stanley and JPMorgan all declined to comment.

Enerjisa Uretim, which has plans to boost the share of renewables in its energy mix and enter the European market, is seeking to increase its earnings before interest, tax, depreciation and amortization, or Ebitda, to around $1 billion in the mid-term from $631 million in 2022, according to the latest available data on its website.

E.ON became a partner to Sabanci Holding in 2013 in the Istanbul-based conglomerate’s energy business. They spun off their joint energy unit and offered power distribution grid operator Enerjisa Enerji AS’s 20% stake in 2018 through a $400 million IPO. 

The partners have ever since been seeking a favorable time for an IPO at the energy generation unit.

Dozens of companies, mostly with valuations of less than $200 million, have listed on Borsa Istanbul since 2018. That’s dented the appetite of some larger companies to attempt share offerings.

About 200 IPO deals have fetched a little more than $9 billion in share sales, according to data compiled by Bloomberg during the same period.

(Updates with JPMorgan’s decline to comment.)

©2024 Bloomberg L.P.