Restructuring massive debt, Bereket Enerji to trade hydroelectric, wind plants on stock market

Published 05.07.2019 00:07

Turkey's leading energy group Bereket Enerji has agreed with nine banks to restructure its $4.6 billion debt. As part of the deal with the banks, the company is preparing to publicly trade its hydroelectric and wind power plants with a capacity of 1,156 megawatts (MW) next year to draw investment from giant investment funds that are highly interested in renewable energy projects.

Bereket Enerji CEO İdris Küpeli, in a meeting with reporters on Wednesday, explained that restructuring the company's non-performing loans, which accumulated to $4.6 billion, started in 2017 and its agreement with nine banks has become the largest restructuring in the sector.

Renewable energy is a great opportunity for Bereket Energy, Küpelis said. "Giant investment funds that put money in the world's largest projects allocated three to five percent of their investments to renewable energy projects. Although this number may seem small, we are able to observe that three or five percent corresponds to a large amount given the size of billion-dollar portfolios," he remarked. He stressed the urgency to seize the opportunity arising from the increasing appetite for renewable investments. Speaking of the negative developments in the energy sector, the Bereket Enerji CEO acknowledged that investors could not produce supportive price projections. "As a result of the increasing number of energy investments, supply surpassed the energy demand, which caused a downward trend in prices. Neither our projections nor the predictions of the financial corporations came through. The price projections put forward by international consultancy firms failed us. We are now realizing the mistakes we have made," Küpeli said, explaining in detail what has gone wrong in the financial structure of the energy sector in the last couple of years. "The rapid growth in the energy sector was financed through loans, not through company equities," he added.

Most of the energy firms in Turkey received loans in foreign currency, particularly in the U.S. dollar. However, the currency volatility and the depreciation of the Turkish lira made it difficult for the firms to pay their loans back as their earnings in lira were not able to fulfill the company liabilities.

Bereket Enerji has taken a two-year investment break, Küpeli said, but the company will continue rehabilitation investments of the existing terminals. The firm will invest $200 million for the rehabilitation of the Yatağan Thermal Power Plant in Muğla. Another renovation investment with an amount of $100 million will be made in the distribution network of the company, the CEO announced.

Yatağan Thermal Power Plant established in Yatağan Province of Muğla in 1982, was incorporated into Bereket Energy Group at the end of 2014. Turkey's fifth-biggest thermal power plant, Yatağan has the capacity to supply the daily electric need of 852,721 people. With an installed capacity of 630 megawatts, the annual power generation of Yatağan Thermal Power Plant is around 4,095 gigawatts (GW). Bereket Enerji has also another thermal power plant in Zonguldak. Established in 1948, Çatalağzı, is Turkey's first thermal power plant with a capacity of 314 MW. After being operated by various state-run energy companies, Çatalağzı was acquired by Bereket Enerji in 2014. The company also has two electricity distribution companies providing supply for Aegean provinces. In March, Bereket Enerji began manufacturing indigenous photovoltaic cells that convert the energy of light directly into electricity by the photovoltaic effect. "Although the investment amount was only $15 million, the manufacturing of photovoltaic cells has a high added value," Küpeli said.

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