OMV AG, central Europe’s biggest oil and gas company, is in talks with Morgan Stanley to help manage the sale of Turkey’s biggest fuel retailer, three people with knowledge of the matter said.
The company, which decided to sell its Istanbul-based unit OMV Petrol Ofisi AS to raise cash as it struggles with low oil prices, may take time to decide on the mandate, said the people, who asked not to be identified because the process isn’t public. Vienna-based OMV has already hired an Istanbul-based legal firm for the deal and may sign up a second investment bank.
OMV bought Petrol Ofisi for more than $2.5 billion from Dogan Sirketler Grubu Holding AS, a Turkish group with interests in media to energy and real estate. The company operates 1,785 petrol stations in Turkey and owns the country’s largest fuel storage and logistics business. While OMV has the unit on its books with a value of 1.6 billion euros, it may raise as little as $1.3 billion in the sale, according to Bloomberg Intelligence calculations.
Investors from Azerbaijan, China and Japan could show interest in the business, two of the people said. State Oil Company of Azerbaijan, or Socar, could be one of the suitors, three of the people said.
OMV and Morgan Stanley declined to comment. “It’s too early to speak about real interest” in the asset, said Elshad Nassirov, vice-president for investment and marketing at Baku-based Socar, in e-mailed comments.
OMV is selling assets and cutting jobs after the slump in oil and gas prices forced it to write down 3 billion euros ($3.4 billion) of assets including its costly North Sea oil investments last year. Italian gas pipeline operator Snam SpA and Belgium’s Fluxys SA are among potential bidders for a 49 percent stake in OMV AG’s gas transportation business in Austria, people familiar with the matter said earlier this month.
Last week, an Istanbul-based prosecutor sought to press charges against 47 people linked to Petrol Ofisi on historical allegations of fuel smuggling, relating to the period 2001 to 2007. The accused included the former CEO of OMV, its present CFO, and the unit’s former Turkish owners, one of whom branded the charges as “politically motivated.”
OMV Petrol Ofisi had sales of 33 billion liras ($11.5 billion) and a loss of 76 million liras in 2014, according to the latest data published before it was delisted. The ratio of its earnings before interest, tax, depreciation and amortization, or Ebitda, to its enterprise value, or market value plus its debt, was 13 at end-2014. The ratio, also known as the Ebitda multiple, is used to value an asset in many mergers and acquisitions transactions.
OMV Petrol Ofisi is the market leader in Turkey, with a 26 percent market share and sales of 5.5 million tonnes last year, according to data published by the country’s energy regulator EPDK. It was followed by Opet Petrolculuk AS, a unit of Koc Holding AS, with a 16.8 percent share and Shell & Turcas Petrol AS, a joint venture owned by Royal Dutch Shell Plc and Turcas Petrol AS, with 16 percent.