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08 December 2019

China Merchants Group seeks controlling stake in Turkish bridge project

The partners have been operating the toll bridge since it opened in 2016 after an investment of about $3 billion.

Turkish bridge/Bloomberg

China Merchants Group is in talks to buy a majority stake in a Turkish bridge operator that ailing Italian builder Astaldi is exiting, reported Bloomberg.

The state-owned Chinese conglomerate is negotiating over the stake with Istanbul-based IC Yatirim Holding. Astaldi, which has previously said it owns 33 per cent of the project, announced this week it is selling its portion to IC Yatirim, giving the Turkish firm 100 per cent of the venture.

China Merchants Group and IC Yatirim are in talks with lenders to refinance a $2.3 billion loan.  The loan was taken out in 2013 to build a suspension bridge and connecting roads across the Bosporus strait in Istanbul, Turkey’s most populous city.

At that time, parties to the deal were discussing a valuation of about $1 billion to $1.2 billion as the total equity value of the asset, though the final price hinges on the new debt terms. Astaldi, which is being taken over by another Italian builder Salini Impregilo, is divesting from the project as part of an agreement with court administrators overseeing its creditor-protection process.

They won backing from the government earlier this year to adjust the exchange rate used to calculate the toll twice a year, instead of once a year.


RELATED STORIES: IC Yatirim Holding China Merchants Group Astaldi





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