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EBRD buys eurobonds issued by Turkish electricity producer Aydem

The European Bank for Reconstruction and Development (EBRD) has bought $75mn of eurobonds sold by Istanbul-listed Aydem Yenilenebilir Enerji (AYDEM), formerly Bereket Enerji, the lender said on August 9.

In July, Aydem sold $750mn of February 2027 eurobonds at a coupon rate of 7.75%.

In April, Aydem sold a 18.44% company stake in an initial public offering (IPO) for Turkish lira (TRY) 1.3bn ($150mn). The company sold a total of 130mn shares but its paid-in capital only increased by TRY5mn to TRY705mn from TRY700mn, with a remaining TRY100mn representing the sale of existing shares by the owner.

Aydem Yenilenebilir operates 20 hydro plants, three wind-power plants, one geothermal plant and one biogas plant with a total installed capacity of 1,020MW in Turkey.

In October, Bloomberg reported that Bereket Enerji (or Aydem), owned by Ceyhan Saldanli, launched talks with nine local lenders to restructure $3.9bn of already restructured loans.

Saldanli, owner of Aydem Enerji, also has two electricity grid operating companies. Aydem Perakende operates in Denizli, Aydin and Mugla provinces with 1.9mn customers. The other grid, GDZ, operates in Izmir and Denizli provinces with 3.5mn customers.

In 2019, Bereket restructured $5bn of debt. According to Bloomberg, Yapi Kredi, Vakif, Is, Garanti and TSKB were among creditors of Bereket, which borrowed billions of dollars to acquire power plants and grids in privatisation deals.

On the 158th page of the IPO prospectus for Aydem Yenilenebilir, details of the debt restructuring in 2019 and existing loans that apply to the company are provided.

Accordingly, Aydem Yenilenebilir had $660mn and €10mn, or TRY5bn in total based on the exchange rate at the time, of outstanding loan stock at end-2020.

With the proceedings from the eurobond sale, Aydem Yenilenebilir will repay its defaulted debt to banks and will pay 43%, or $320mn, in coupons in 5.5 years.

According to the MW100-2021 report, Aydem is Turkey’s eight largest power producer with an installed capacity of 1,964MW, including Aydem Yenilebilir’s 1,020MW and 945MW coal plants.

Aydem is seen as B/Stable, five notches below investment grade and one notch below Turkey’s sovereign rating, by Standard & Poor’s, and as B+/Stable, four notches below investment grade and one notch below Turkey’s sovereign rating, by Fitch Ratings.

Since 2009, the EBRD has invested €14bn in Turkey while its current portfolio stands at €7bn.