Saudi utility powerhouse ACWA Power has successfully restructured its debt and ownership in its Turkish affiliate, ACWA Guc, through a strategic conversion of outstanding loans into equity.
The move follows an agreement with major lenders and minority shareholders, creating a major shift in the company’s financial strategy.
ACWA Guc, which operates a 950-megawatt combined cycle gas turbine power plant in Kirikkale, Turkey, is partially and indirectly owned by ACWA Power.
The restructuring deal involves converting the existing loans into shares of ACWA Guc, in accordance with specific shareholding agreements and conversion terms outlined in a statement on the Saudi Stock Exchange, Tadawul.
To facilitate this transition, a wholly owned subsidiary of ACWA Power will disburse SR496.5 million ($132.2 million) to the lenders over the next three years. This payment plan aims to streamline the financial obligations of ACWA Guc and enhance its operational efficiency.
Following the debt conversion, ACWA Power, along with its subsidiaries, current minority shareholders, and relevant stakeholders, has entered into a series of contractual agreements. Post-restructuring, ACWA Guc is expected to be free from commercial debt to third parties and will continue to be classified as an equity investment for ACWA Power.
The $1 billion Kirikkale Power Plant, inaugurated in November 2017 with a ceremony attended by Turkish President Recep Tayyip Erdogan and then-Energy Minister Berat Albayrak, remains a cornerstone of ACWA Power’s investment in Turkey.
With a capacity of 1,000 MW, the plant meets approximately 3% of Turkey’s electricity demand and is recognized as one of the most efficient combined cycle gas power plants in the country.
The Kirikkale facility contributes significantly to Turkey’s energy grid and economic stability by reducing gas consumption and enhancing energy efficiency.
In addition to this restructuring, ACWA Power recently completed another strategic transaction, finalising the sale of a 35% stake in two of its subsidiaries to China Southern Power Grid International for SR595.9 million.
The deal, announced in July, involves the sale of shares in ACWA Power Bash Wind Project Holding Co. and ACWA Power Uzbekistan Wind Project Holding Co.
