E.ON, Sabanci Benefit from Turkish IPO

German power company E.ON and its Turkish partner will each earn €158mn ($197mn) from an initial public offering in their Turkish power venture Enerjisa. Meanwhile E.ON waits to hear if the sale of its stake in Uniper has succeeded.

E.ON said February 5 that the  IPO consisted of a secondary offering of 23,621bn shares, representing 20% of Enerjisa, with each of the joint venture shareholders, E.ON and Sabanci, selling the same amount. 

This values the company at about €1.58bn (Turkish lira 7.38bn), said E.ON, adding that trading of the stock is expected to begin on the Borsa İstanbul February 8. The 20% divested is thus worth  €316mn. The offer price was announced February 5 as Turkish lira 6.25/share, which reports indicated was towards the low end of the expected range. 

"Our 9mn customers in Turkey will benefit from the strengthening of our business,” said E.ON CEO Johannes Teyssen, while Sabanci Holding CEO Mehmet Gocmen said the record level of demand was a clear indication of international investors’ trust in Turkey and in Enerjisa. The IPO was 4.8 times oversubscribed, said E.ON. 

In March 2017, E.ON reported a record full year loss for 2016 of €16bn. E.ON has since tried to raise capital, including by offering its 46.65% stake in Uniper to Finnish utility Fortum for €3.76bn, against the wishes of Uniper management. An additional acceptance period for Uniper shares not held by E.ON ended February 2 2018, and an announcement by Fortum about its takeover bid for Uniper is due shortly. Fortum failed to attract many Uniper shares in its earlier tender that closed mid-January.

Enerjisa reaches 9mn customers in 14 Turkish provinces through its three distribution businesses and provides services to some 20mn people. The price range at which the Enerjisa IPO was offered was Turkish lira 6.25 ($1.66)-7.50.