Zorlu Energy merging its geothermal, renewables businesses for IPO
Zorlu Enerji Elektrik or Zorlu Energy intends to establish a renewables subsidiary and prepare it for an initial public offering. The new company, Zorlu Yenilenebilir Enerji, will focus on geothermal projects, according to the agenda prepared for the general assembly next month.
Zorlu Jeotermal Enerji Elektrik, Zorlu Doğal Elektrik and Rotor Elektrik, fully owned subsidiaries of Zorlu Enerji Elektrik – Zorlu Energy, are about to be merged into one entity. The member of Zorlu Energy Group continued with the preparations for a spinoff, saying the new firm, Zorlu Yenilenebilir Enerji (Zorlu Renewable Energy), would be listed on the stock market.
The business will be focused on the geothermal energy sector as, how Zorlu Energy Chief Executive Officer Sinan Ak put it earlier this year, it is a strategic niche.
IPO planned for next year
The producer of electricity from renewable sources also has plans to invest in solar and wind power. It already has hydroelectric, geothermal and wind power assets.
The revenue from a stake sale will be used for growth and debt reduction, according to CEO Sinan Ak
The plan is scheduled for a vote at an extraordinary general assembly on August 18. The initial public offering is seen in the first half next year, which is a delay from original plans. Ak said the revenue from a stake sale would be used for growth and debt reduction.
Optimistic view regardless of pandemic
He told Bloomberg HT last month that households’ consumption of electricity increased by 15% amid the COVID-19 pandemic, against a 40% slump in the industry. Measures to contain the novel coronavirus led to some loss in revenue, the CEO stressed. Nevertheless, he offered an optimistic view for the energy company, pointing to favorable movements in interest rates and foreign exchange.
Zorlu Holding is a diversified conglomerate, operating also in the areas ranging from textiles to financial services.