“We are proud to be the only Malaysian company to be awarded in this bidding round...”

TAN SRI SHAHRIL SHAMSUDDIN, Sapura Energy Bhd president and group CEO

ISTANBUL: Turkish conglomerate Gama Holding is in talks with Tenaga Nasional Bhd (TNB) and other potential buyers on a sale of its 50.5 per cent stake in its Gama Enerji energy unit, three sources said, as part of a US$1 billion (RM4 billion) debt restructuring.

Gama, which has businesses spanning oil, cement, petrochemicals and natural gas, is the latest Turkish company to attempt to restructure foreign-currency debt amid a sell-off in Turkish currency, lira. It is in talks with nearly 20 banks on restructuring some US$1 billion worth of debt, the sources said.

Russia’s second-largest bank, VTB, is one of the creditors involved in the restructuring process and is conducting the stake sale talks, they said.

TNB, which acquired 30 per cent of Gama Enerji in 2015 for US$243 million, had shown interest in the stake, although VTB was also continuing talks with other possible buyers, one of the sources said.

Gama was not immediately available for comment. VTB declined to comment. TNB did not respond to a request for comment outside of regular business hours.

“The total debt of the firm is US$2 billion but around US$800 million is subject to debt restructuring. The Gama Enerji stake sale will be one of the most valuable assets they have to cover part of this debt,” one of the sources said.

“This sale is a partial solution. The remaining amount will be restructured.”

The sale is expected to be completed by year-end, two of the sources said.

Gama Enerji generates energy from hydroelectricity, wind and natural gas plants, with more than 1,100 megawatts installed power around Turkey. The International Finance Corp owns the remaining 19.5 per cent in Gama Enerji.

As of April, Turkish companies had US$225 billion in long-term overseas loans, almost all of that in dollars or euro, central bank data showed. Turkish firms have been drawn to foreign-currency debt because of lower interest rates, but have now been squeezed by the weak lira.

The lira has a lost a fifth of its value this year.

Yildiz Holding, the owner of global food brands including Godiva chocolate and McVitie’s biscuits, last month signed a deal with its banks to refinance US$5.5 billion in debt.

Moody’s has warned that there could be a spike in problem loans for Turkish banks if the lira weakens further.

President Tayyip Erdogan has declared himself an “enemy of interest rates” causing concern about central bank independence and adding to the lira’s woes.