Indebted Turkish firm Aydem plans IPO, defying slump in share sales, lira

Aydem Holding of Turkey is planning an initial public offering of its renewable energy production unit in the first quarter of 2021, expecting to raise around $300 million, Bloomberg reported on Thursday.

The share sale by the re-branded firm, previously known as Bereket Enerji, would dwarf total IPOs held in Turkey during 2018, 2019 and 2020, and would be the biggest since discount grocer Şok raised $595 million in 2017, the year preceding a currency crisis in the country, according to figures provided by Bloomberg.

Aydem Holding underwent Turkey’s second-largest debt restructuring last year, Bloomberg said. The IPO is happening a year later than previously planned, it said, citing people with knowledge of the matter. Proceeds from the IPO will be used to repay debt, the people said.

The company is allegedly planning the IPO after the lira slumped to successive record lows against the dollar. The currency has dropped by almost 30 percent this year after foreign investors exited the country and Turkish deposit holders bought dollars and gold to protect their savings. A weaker lira makes it more expensive for Turkish companies to service their debts.

Turkey’s stock exchange, Borsa Istanbul, has had $57.3 million worth of IPOs this year, $40.7 million in 2019 and $27.3 million in 2018, Bloomberg said. The planned share sale would be more than double that total.

Aydem Holding had struck an agreement with banks to extend the maturity of about $5 billion in loans. It is now in talks with banks to lower interest rates on borrowings that had already been restructured, people with knowledge of the matter said last month, according to Bloomberg.

The decision to go ahead with the IPO would depend on the appetite of investors, the people said.

Aydem Yenilenebilir Enerji has 25 power plants with a total production capacity of over 1,000 megawatts, according to its website. Aydem Holding also runs coal-fired power plants and energy distribution networks.