Turkey’s Aydem Group Plans 2025 IPOs for Power Grid Operators

(Bloomberg) -- Aydem Enerji Yatirimlari AS, a Turkish power generator and distributor, is preparing initial public offerings for two of its units in the first half of 2025.

The group is planning listings for GDZ Elektrik Dagitim AS and ADM Elektrik Dagitim AS on the Istanbul bourse that could value the two grid operators at $2.2 billion and $1.5 billion respectively, Aydem Enerji Chief Executive Officer Serdar Marangoz said in an interview. 

Investment banks have already been sounded out to arrange the IPOs and a final selection is due soon, Marangoz said. He didn’t elaborate on the stakes that would be on offer or the amount of money the companies seek to raise.

“If all market conditions are favorable, we can have the IPO in the spring,” said Marangoz, who took over the CEO role last month. 

The prospective listings bode well for a revival in Turkish IPO-activity as the Borsa Istanbul 100 Index recovers from a slump following its record high mid-year. Tighter monetary policy has taken some shine off the attraction of first-time share sales for local investors, pushing them to favor established stocks and interest-bearing bank deposits.

Listings for GDZ Dagitim and ADM Dagitim were in the cards as far back as 2018, but were put on hold as Bereket Enerji, as their parent was called at the time, had to restructure $4.7 billion of loans the following year. 

Turkey has 21 power grids, which were all privatized during the early 2010s with 30-year concession agreements.

The companies will use the proceeds of the offerings to invest in their grids and pay back borrowings, Marangoz said. GDZ Dagitim, which sells power to 3.9 million users and has an 8% share in Turkey’s power distribution market, has about $160 million in annual regulatory investment obligations. ADM Dagitim, which serves 2.2 million users, has $120 million in similar commitments, according to Marangoz.

An IPO in ADM Dagitim is likely to go ahead first as GDZ Dagitim is also weighing an increase in a $400 million bond issuance deal from October, Marangoz said.

Aydem Yenilenebilir, which is Aydem Enerji’s listed renewables unit, could offer a fresh stake to raise funding for investments in generation capacity, Marangoz said. Aydem Yenilenebilir will also refinance its $750 million of 2027 bonds next year, he said.

©2024 Bloomberg L.P.