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Kazanci Plans $3 Billion Power Investment on Goldman Deal

Kazanci Holding AS, a Turkish group with interests in energy and building, will invest as much as $3 billion in energy production by 2017 after agreeing to sell 13.3 percent of its Aksa Enerji Uretim AS to Goldman Sachs Group Inc.

The investment will help Istanbul-based Aksa Enerji, Turkey’s biggest non-government power producer, raise capacity to 4,500 megawatts by 2017 from 2,036 megawatts at the end of 2011, Kazanci Deputy Chairman Cemil Kazanci said at a news conference today in the Turkish city. About 60 percent of the investment will be financed by loans, he said.

Kazanci signed an agreement today for a syndicated loan of $400 million from Goldman Sachs, Turkiye Garanti Bankasi AS and Turkiye Is Bankasi AS. Goldman will provide $150 million of the loan while Garanti and Isbank will supply equal amounts of the remainder, the companies said in a joint statement.

“We will use almost half of the loan to strengthen the investment capability of Aksa Enerji,” Kazanci said. The rest of the funds will repay a $192 million bridge loan that the family-owned, Istanbul-based holding company received from Goldman last year, he said.

Goldman will initially own 5.82 percent of Aksa Enerji after paying $105 million, and the New York-based lender has committed to buy another 7.48 percent for $135 million, Kazanci said.

Loan Terms

The syndicated loan, for which Kazanci’s 65.5 percent and Goldman’s 13.3 percent stakes in Aksa Enerji will be used as collateral, will mature in six years, with no payments required during the first three years, Kazanci Holding said in a stock market filing on April 6. Goldman may sell the Aksa Enerji holding at any time during the maturity period, it said.

Aksa Enerji fell as much as 2.6 percent to 3.82 liras and was trading down 1.8 percent at 4:18 p.m. in Istanbul.

The stake purchase will strengthen Aksa Enerji’s position among international power producers, Dalinc Ariburnu, a London-based board member of Goldman Sachs International, said at the news conference.

Kazanci Holding is looking at bidding this year when the government revives canceled power-grid auctions, the deputy chairman also said.

Aksa Enerji’s electricity sales to Syria will continue under the contract it signed with Turkey’s southern neighbor last year to provide 2 billion kilowatt-hours of power from a 500-megawatt capacity, Kazanci said. His comments came as violence in Syria spilled across borders into Turkey and Lebanon as President Bashar al-Assad’s regime spurned today’s United Nations deadline for a cease-fire.

“This is a humanitarian matter and we have the contract until June, so our sales will continue until then,” Kazanci said.

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