January 17, 2019 / 4:09 PM / 8 months ago

Turkey's Palmet in talks for EWE energy assets after Azeri firm drops out

ANKARA (Reuters) - Turkish gas distributor Palmet is in talks to acquire the Turkey energy business of Germany’s EWE, an official from Palmet said on Thursday, after Azeri state firm SOCAR confirmed it had withdrawn from discussions to buy the assets.

Reuters reported last month that SOCAR was negotiating to acquire EWE’s Turkish business, which includes gas distribution networks in the industrial cities of Bursa and Kayseri. The acquisition was due to be completed in the first quarter of this year.

However, a SOCAR official said it had now withdrawn from the negotiations, without giving a reason. A representative for Palmet said it was in advanced talks for the assets, and would pay between 130 million and 150 million euros ($148-170 million).

An EWE spokesman declined to comment.

EWE, the fourth-largest natural gas supplier in Turkey in terms of customers, has said it was looking to sell its local distribution units after being hit by the weakening lira.

The lira lost 30 percent of its value last year, putting pressure on companies, particularly in energy and construction, that have large foreign debts and lira-denominated revenue.

Palmet has gas distribution businesses in the Gebze district of Kocaeli province and the eastern city of Erzurum.

EWE’s energy operation in Turkey includes gas distributors Bursagaz and Kayserigaz. It also includes the EWE Enerji and Enervis businesses, which are involved in energy trade and service, according to its annual report.

Reporting by Can Sezer; Additional reporting by Tom Sims in Frankfurt; Writing by Ece Toksabay; Editing by David Dolan and Dale Hudson

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