€27 million loan to Turkuaz Petrol Ürünleri for acquisition of competitor
The EBRD is supporting a landmark privatisation in Turkey with the provision of a loan of up to €27 million (TRY 160 million) to Zulfikarlar Holding A.S. subsidiary,Turkuaz Petrol Ürünleri A.Ş for the acquisition of Turkiye Petrolleri Petrol Dagitim A. Ş. (TPPD), the state-owned fuel distributor.
TPPD was founded in 2006 as a subsidiary of the state-owned national oil company TPAO and has a network of 388 petrol stations focused on the Ankara region. It is the sixth largest market player among 84 licensed fuel distributors in Turkey with a 4.3 per cent market share in 2016. In addition, it operates seven fuel terminals and two LPG storage facilities. The product portfolio includes diesel, gasoline products, fuel oil, LPG and lubricants.
Turkuaz is a private Turkish company founded in 1994 and today operates 325 petrol stations, with almost half located in the Marmara (north-west) and Middle Anatolia regions. In 2016 Turkuaz won a competitive process for the privatisation of TPPD against three competitors. The acquisition will allow the company to compete more effectively with larger market players thanks to its increased size.
Arvid Tuerkner, EBRD Managing Director, Turkey, said: “We are proud to support this important step for the Turkish fuel retail sector. The successful privatisation will send a signal to the market about Turkey’s continuing commitment to private sector development and support. Combining the strength of the two fuel distributors should eventually benefit customers thanks to increased competition.”
Isfendiyar Zulfikari, Chairman of Zulfikarlar Holding, said: “Our group has always pursued sustainable growth and value creation in all its operations until today. This loan is one of these growth steps which not only expresses the confidence in Zülfikarlar Holding’s corporate and business performance but also in our country's economy and its future. The loan stands as an important milestone which will bring momentum to our business.”
The EBRD loan is part of a larger US$ 222 million financing package which includes an acquisition loan of €73 million (TRY 414 million) from the EBRD, Is Bank and TSKB as parallel lenders, and US$ 131 million of working capital facilities from Is Bank and TSKB. The transaction is the last major milestone in the privatisation of the Turkish fuel retail sector.
The EBRD is a major investor in Turkey. Since 2009, it has invested €10 billion in various sectors of the Turkish economy, with almost all investments in the private sector. In 2017 alone, the EBRD invested €1.6 billion in 51 projects in the country.