Izdemir sells 24% stake in coal plant unit via Istanbul IPO for 3bn lira

Izmir-based steel mill operator Izmir Demir Celik (Izdemir/IZDMC) has sold 138mn shares, amounting to a 24% stake, in Izdemir Enerji (IZENR) via a Borsa Istanbul initial public offering (IPO), according to a filing by Garanti Yatirim Menkul Kiymetler (a unit of Garanti BBVA (GARAN), controlled by BBVA (Madrid/BBVA)), which acted as the intermediary in the offering.

The transaction was concluded for a consideration of Turkish lira (TRY) 2.6bn ($97mn), or TRY 19 per share. The bookbuilding was held during August 8-10.

No participants in the IPO acquired more than 5% of the offered shares. According to local legislation, intermediaries are obliged to file the details of real or legal persons who acquire more than 5% of offered shares in a Borsa Istanbul IPO.

Lately, no big buyers have been reported as taking part in Istanbul IPOs, though an escalation is observed in the number of listings. When things are observed "from space", it may appear that Turks are collectively rushing to buy shares in IPOs. The appearance, however, may be deceptive as no-one is actually checking whether these buyers are real individuals or whether the buyers are made up of fake accounts controlled by puppeteers.

Via the IPO, Izdemir Enerji hiked its paid-in capital by TRY 75mn to TRY 575mn, while Izdemir sold an additional 43mn existing shares.

The Izdemir Enerji IPO is a typical example of the "matryoshka doll"-style IPOs held on Borsa Istanbul. Izdemir is already a listed company and Izdemir Enerji is an Izdemir unit. In some cases, the same company is offered to the public four or five times.

Following the completion of the offering, Izdemir controls a 63% stake in the company while port operator IDC Liman, a fully-owned unit of Izdemir, has 6%.

Sahin Koc Celik Sanayi holds a 4% stake in the company and Akdemir Celik, a 90% unit of Izdemir, has 2%. Halil Sahin holds 0.7%.

A total of 1,000 privileged Type A shares, representing a 0.0002% stake, are held by the referred to shareholders.

Izdemir Enerji operates a 370-MW plant fired by imported coal. It is planning to build two solar plants with a combined capacity of 76 MW.

At end-May, Turkey had 15 "import coal" plants with a combined capacity of 13 GW, in addition to 22 lignite plants with a combined capacity of 10 GW. The country had an overall installed capacity of 110 GW.

Izdemir was launched in 1975 and was listed in 1986. In 1988, the company was transferred to Isbank (ISCTR). In 2005, Sahin Koc Celik Sanayi acquired the company from Isbank.

Sahin Koc Celik Sanayi has a 58% stake in Izdemir. Chairman Halil Sahin has 4%. Nuri Sahin controls 3%. Mahmut Nedim Koc holds 3%. Ahmet Bastug and Huseyin Bastug have 1% each. Selim Sahin holds 1%. A 27% stake in Izdemir is listed.

Sahin Sirketler Grubu Holding has a 75% in Sahin Koc Celik Sanayi, while Mahmut Nedim Koc holds the remaining 25%.

The Sahin and Bastug families also control Sahin Holding.