The FINANCIAL -- Encouraging local currency financing, the EBRD is investing TRY 30 million in the TRY 150 million Turkish-lira-denominated bond issued by the country’s second-largest retailer, Migros.
It is the first time that the company is tapping debt capital markets. The issuance, arranged by Is Investment, will be listed on Borsa Istanbul and the proceeds will refinance short-term loans.
The Bank’s investment comes at a time of high volatility in the lira, when the right financing mix, including local currency financing, is critical for Turkish companies. It also reinforces the EBRD’s commitment to developing and deepening local currency and local capital markets.
Migros operates in 81 Turkish provinces, through a network of 1,976 food retail stores under Migros, M-Jet, 5M and Macrocenter banners. The company is also active in Kazakhstan and FYR Macedonia with 41 Ramstore outlets.
Listed on Borsa Istanbul, the company is owned 50 per cent by Anadolu Group, a diversified fast-moving consumer goods group and a longstanding partner of the EBRD. Of the remaining shares, 23 per cent belong to private equity group BC Partners and 27 per cent are held by free-float investors.
The transaction marks the EBRD’s first financing of Migros in Turkey, having previously financed the retailer’s operations in Kazakhstan.
The EBRD is a major investor in Turkey. Since 2009 it has invested €10 billion in various sectors of the Turkish economy, with almost all investment made in the private sector. In 2017 alone, the EBRD invested €1.6 billion in 51 projects in the country. Nearly a third of this financing was provided in Turkish lira.