Aras Electricity Distribution Company

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A joint venture between Kiler and Calik Holding Groups (Kiler-Calik JV) of Turkey signed the final share transfer agreement in August 2013 to acquire 100% shares of Aras Elektrik Dagitim A S (Aras EDAS), a state-owned power distribution company that distributes electricity to over 815,000 customers in 7 cities throughout East Anatolia - Erzurum, Agri, Ardahan, Bayburt, Erzincan, Kars and Igdir. The competitive tender was conducted by turkish privatization administration, Ozellestirme Idaresi Baskanligi (OIB) in September 2008. The Kiler group originally participated in the tender alone and won the tender by offering the highest price of USD 128.5 million. After much delays, Kiler decided to team up with Calik Holding in 2013 to take over Aras EDAS. Kiler formed a joint venture with majority stake of 51% and the balance is held by Calik. The Kiler-Calik JV signed a thirty year Transfer of Operating Rights (“TOR”) agreement in August 2013 that was backed by Share Sale model ("TSS model"). Under the TSS model, asset ownership of new as well as existing distribution assets belong to the state-owned power distribution company Turkiye Elektrik Dagitim Anonim Sirketi (TEDAS), while the investor (Kiler-Calik JV) attains the right to operate the distribution network together with the obligation to undertake all new necessary investments. According to this model, Kiler-Calik JV is the sole owner of the shares of Aras EDAS and has the sole license (monopoly) for the distribution of electricity in the designated region from Energy Market Regulatory Authority (EMRA). All EMRA approved investments shall be realized by the Kiler-Calik JV and will be recovered through the tariffs. Except for cases of investor misconduct, the part of investments not recovered via the tariffs shall be paid by TEDAS to the private operator upon the expiry or termination of the contract. Kiler-Calik JV took over Aras EDAS in August 2013 after it paid 100% of the bid amount of USD 128.5 million. http://www.calik.com/en/PressReleases2013/2013/08/27/kiler-and-calik-to-distribute-electricity-of-7-cities?id=92f1c6ad-8dd6-4bc3-b4a3-4e4bc5c55782