Meram Elektrik Dagitim A.S. (MEDAS)

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On October 30, 2009, a joint venture of Alsim Alarko Sanayi Tesisleri [Turkey] (51%) and Cengiz Group [Turkey] (49%) finalized the acquisition of 100% of the capital of Meram Elektrik Dagitim A.S. (MEDAS) from the Turkish state. At the time of the concession, MEDAS distributed electricity to approximately 1.58 million customers in six peovinces in the central Anatolian region: Konya, Karaman, Aksaray, Kirsehir, Nevsehir and Nigde. The concession was part of a government program to introduce private operation of, and investment in, the 20 regional electricity distribution companies owned by the state-owned Turkiye Elektrik Dagitim A.S. (TEDAS). The program followed a Transfer of Operating Rights and Share Sale model ('TSS model'). In this model, the private investor became the sole owner of the distribution companies' equity and the unique licensee for distributing electricity in each region for a period of 30 years. However, TEDAS retained ownership of the distribution network assets and of certain other items essential for operating the distribution assets. The private investor was obliged to undertake the necessary network investments, recoverable through the tariffs. These investments were embedded in the tariffs during the first tariff implementation period (2006-2010). After 2010, the private investor was to submit an investment plan annually to the Electrity Market Regulatory Authority (EPDK) for its approval. Alsim Alarko/Cengiz won the tender for the block sale of 100% of MEDAS organized by Turkey’s Privatization Administration (OIB). OIB prequalified 16 companies in July 2008, seven of which submitted final bids. In September 2008, it was officially announced that Alsim Alarko had submitted the highest bid of US$440 million and was hence declared the winner. The other bidders for MEDAS were Enerjisa Enerji Uretim A.S., Cengiz Insaat San. Ve TIC. A.S., Kiler Alisveris Hizmetleri ve Gida San Tic A.S., a joint venture between Barmek Holding A.S. and Anel Telekomunikasyon Elektronik Sistemleri A.S., and Ittifak Holding A.S. The award was formally approved by Turkey’s Competition Board in December 2008 and by the Privatization High Council (OYK) in April 2009. The project reached financial closure on October 30, 2009, when Alsim Alarko/Cengiz signed the sale and transfer agreement with the Turkish authorities.