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Turkey Power Grid Auctions Draw $5.1 Billion in Bids

Dec. 7 (Bloomberg) -- Turkey drew total bids of $5.1 billion in auctions of three power grids in the Asian half of Istanbul and in the southern cities of Adana and Antalya.

MMEKA Makine Ithalat Pazarlama & Ticaret AS, controlled by businessman Mehmet Emin Karamehmet, former chairman of the country’s biggest mobile phone company, placed the winning bid of $1.8 billion for the network in Istanbul, beating 10 rivals in the auction in Ankara today, according to Ahmet Aksu, the head of state asset sales.

The results give MMEKA control of the grid in both halves of Turkey’s biggest city and brings to $15.9 billion the total bids in the country’s drive to divest control of power distribution to non-state companies. Today’s auction completed the sale of grids in the hands of Aksu’s sales agency.

Turkey is selling grids and generators to attract private investment to an industry where demand is set to rise 6 percent annually, according to estimates published Nov. 9 by Deloitte LLP. The country needs as much as $150 billion in energy investment by 2023, Energy Minister Taner Yildiz said Nov. 24.

MMEKA in August offered $2.99 billion for the grid on the European side of Istanbul. Controlling all of Istanbul will allow the company to “optimize” supply, Mehmet Kazanci, Karamehmet’s partner, told reporters after the sale. He declined to comment on financing for the company’s bids.

Adana Network

Yildizlar SSS Holding AS won the auction of the Adana grid with a bid of $2.1 billion. Ankara-based Yildizlar owns silver mining company Eti Gumus AS and bought the grid in the western Osmangazi region in June for $485 million.

Park Holding AS, the group of companies owned by businessman Turgay Ciner that has interests from power generation to media, placed the winning bid of $1.2 billion for the grid in Antalya in the last of the sales.

The asset sales agency has now sold 18 grids in auctions this year and last. Some of those sales are yet to be completed and payment is likely next year, when the government aims for 13.7 billion liras ($9.3 billion) in revenue from selling assets, according to the medium-term economic program.

The agency received a total of 39 bids for today’s sales, it said last week. Bidders registered for the Istanbul grid sale include Enerjisa Enerji Uretim AS, the joint venture between Haci Omer Sabanci Holding AS and Austria’s Verbund AG. The Istanbul grid drew 11 bidders, Antalya 15 and Adana 13.

Istanbul Anadolu Yakasi Elektrik Dagitim AS, also known as Ayedas, serves about 2.2 million commercial and household subscribers in the eastern half of Istanbul, according to information given to reporters at today’s sale. About 7.5 percent of the grid’s energy is stolen, according to the website.

Akdeniz Elektrik Dagitim AS has 1.5 million subscribers around Antalya, with a theft rate of 9 percent. Toroslar Elektrik Dagitim AS, which provides power to 2.7 million subscribers in and around Adana, has a theft rate of about 8 percent.

To contact the reporters on this story: Steve Bryant in Ankara at sbryant5@bloomberg.net; Ali Berat Meric in Ankara at americ@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg in Jerusalem at phirschberg@bloomberg.net.

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