Turkish natural gas distributor Aksa Doğalgaz, a Kazancı Holding company that conducts operations in 21 out of the 72 natural gas distribution regions in Turkey, is planning an initial public offering (IPO) for a 30 percent stake in the company, according to a report in Turkish daily Dünya.
Aksa Doğalgaz CEO Yaşar Arslan said that they are still the largest natural gas distributor in Turkey, stressing that it can make sales to qualified investors or a broad buyer portfolio. Arslan noted that they envisage a stock exchange listing for 30 percent of the company's capital.
"Aksa Doğalgaz, one of Turkey's major companies with its current scale, future investments and values, is trying to go public as a safe haven in the capital markets," the CEO said.
Pointing out that Aksa Doğalgaz's work on the IPO will intensify in 2018, Arslan said they will determine the date of sale of the shares taking into account other public offerings in the sector and the developments in the capital markets. He noted that a 30 percent stake in Aksa Doğalgaz can be sold to a broad investor base, and that the public offering can also be made for qualified investors.
Arslan also stated that the preference could be used in this direction if the advantages provided by the legislation to the IPO in the status of Real Estate Investment Partnership continue in 2018 as well.
According to the information the executive provided, Aksa Doğalgaz operates Turkey's largest natural gas network, with close to 25,000 kilometers of gas pipeline built so far. The company will build an additional 4,400 kilometers of new lines every year with an investment of TL 2.6 billion ($680 million) in the 2018-2021 period. Aksa Doğalgaz will reach a grid length of 42,000 kilometers at the end of 2021, with these investments corresponding to 50 percent of the total investments in the sector.
Aksa Doğalgaz serves in the most extensive geographic area in the country. The company aims to increase employment by 35 percent by hiring 700 new employees in 2018 with the effect of natural gas transportation activities to the districts. It also aims to achieve 10.8 billion cubic meters of natural gas distribution per year via reaching 3.7 million subscribers by 2021, with investments to be made over the next four years.
The company CEO said they believe that Aksa Doğalgaz will create an attractive investment opportunity. He said that natural gas distribution is seen as an appealing sector by investors in international markets.
"The situation in Turkey is similar. The reason for this is that distribution networks in natural gas are not publicly owned," he continued. "Companies operating the network with transfer of operating rights are not considered very appealing. Our advantage is that network ownership is also held by the investor."
