Wednesday, December 26, 2012

SeyitÖmer for Sale, last minute hints for investors

Dear Colleagues,

Long awaited Public Auction will take place on 28 Dec 2012 Friday afternoon, at 1500 hours. We would like to remind you the last minute recommendations on the pricing and risk appetites of participants, herein below.

Investor risk appetite is too high in Seyitomer 600 MWe Thermal power plant privatization, final price may exceed 1b$ on Friday.

Seyitomer 600 MWe thermal power plant sales in privatization will be an excellent application for John Nash's Game Theory. Put a ceiling to your financial capacity and do not exceed that treshold.

Seyitomer 600 MWe Tpp price is first estimated to be between 500-700 million $, however now more than 1b$ considered in market due to high participation. That figure may reach higher but at that time becomes unrealistic/ unreasonable/ difficult to finance.

Ebitda in SeyitÖmer is not so good under upfront estimations at this time, however project is promising to be twice after privatization, that is why investor risk appetite is high.

Investor should consider additional expenses for new ESP to exceed 10mEuros cost, and new FGD to exceed 20mEuros, plus I&C and other equipment renewals for each of total four units in rehab within next 5 years until year 2018. Total rehab cost is estimated to be approx. 200m US Dollars.

Investors should take calculated risks and are not to be blindfolded gamblers in Seyitomer

Pre-qualified groups are as follows,

- Torunlar-Eren JV
- Doğan Energy Investments
- Altek Alarko Electric Power Plants
- D Enerji  Generation and Investments
- Ayen Enerji 
- Park Holding
- Özkar Construction
- Aksa Energy Generation
- Elsan Electrical Utensils
- Limak Construction
- Çelikler Contractors
- Eti Bakır
- Bilgin Enerji-Suba JV
- Kolin Construction
- IC İçtaş Enerji -Fernas Construction JV
- Konya Şeker.-Siyahkalem Mühendislik JV
In Seyitomer 600 Mwe tpp sales, risk is in nearby coal, coal price is approx 3.30 US$/ MmBtu which may be reduced to less than 2.00 USD/MMBTU with further investments.

Overall electricity cost was 5.80 US cents per kWh in year 2011.

Plant generated 3.896b kwh in year 2011 with average 74% availability. Availability may get higher after privatization during upgrading.

16 groups applied for 600 MWe Seyitomer thermal power plant privatization pre- qualification

Open auction for 600MWe Seyitomer TPP privatization is on Friday at 1500 hrs between 16 pre-qualified participants.

Please also do note that Plant is on the remote mountain region, 25km far from Kutahya city center, with almost no major dwellings nearby, so there is almost no local reaction, almost no risk of EIA.

Valuation of a generation asset is not only taking into account financial and operational figures. It also covers strategy, risk appetite, market share and possible upstream and downstream integration(s). 

Aggressive risk appetite of local groups are very different than reputable global energy players. 

Your Comments are always welcome. Best regards

HalukDireskeneli at,  Munich, Germany


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