JCR Eurasia Rating has evaluated Çelikler Taahhüt İnşaat ve Sanayi A.Ş. in an investment category and affirmed Long Term National Ratings as “BBB (Trk)” and revised its outlook from “Positive” to “Negative”.

JCR-Eurasia Rating evaluated the “Consolidated Structure of Çelikler Taahhüt İnşaat ve Sanayi A.Ş. (Çelikler)” in an investment grade category and affirmed credit ratings of “BBB (Trk)” on the Long Term National Scale, whilst revising its outlook from “Positive” to “Negative” and assigned the Short-Term National Ratings as “A-3 (Trk)” along with a “Negative” outlook. On the other hand, the Long Term International Local and Foreign Currency ratings have been affirmed as “BBB-”. Other grades and details of the ratings are given in the table below.

Long Term International Foreign Currency


BBB- / (Negative Outlook)

Long Term International Local Currency


BBB- /(Negative Outlook)

Long Term National Local Rating


BBB (Trk) / (Negative Outlook)

Short Term International Foreign Currency


A-3 / (Negative Outlook)

Short Term International Local Currency


A-3 / (Negative Outlook)

Short Term National Local Rating


A-3 (Trk) / (Negative Outlook)

Sponsor Support



Stand Alone



With an operational history dating back to 1958, Çelikler Taahhüt İnşaat ve Sanayi A.Ş., wholly owned by the “Çelik Family”, has turned into the conglomerate Company through its large-scale investments in the energy sector. The Çelikler Group reached a high level of production, management and project completion capacity through successfully completed projects in the industrial and contracting sectors, historical know-how, experienced management team and a large machine park. The Company principally operates in the fields of “Construction & Contracting”, “Energy”, “Mining”, “Tourism” and “Ready-Mixed Concrete” through its subsidiaries and affiliates with the major sub-segments including the construction of motorways, bridges, railways, buildings, residential complexes, sewage systems, refining of rain, drinking and waste water, stream improvement, stripping, production of ready-mixed concrete, coal and marble, hotel management along with the generation of electricity from thermal, hydroelectric and geothermal power plants.

The Company became one of the significant players in the energy sector following the acquisition of Seyitömer Thermal Plant and management rights of the Seyitömer lignite reserves until 2054, having submitted the highest offer in the tender organized by the Privatization Administration in 2013. Similarly, the Company submitted the highest offer in the tender organized by the Privatization Administration in 2014 and following the acquisition of the Tunçbilek and Orhaneli Thermal Plants and the management rights of Bursa lignite reserves, attained a coal-based installed capacity of 1,175MW following the take-over of the mentioned economic institutions in 2015 and as such notably increased its effectiveness in the market. The Group’s asset size underwent a significant enlargement due to its broadening operating spectrum and sales from electricity attained an important share across rising sales revenues. However, the structural changes brought about by the mentioned transaction in the debt-equity composition, net working capital deficit and very high level short FX position risk and their co-existence with a very high level of off balance sheet contingencies led to an upward momentum in the Group’s general risk levels. However, the funding of the recent acquisition by long-term project financing obtained from a banking consortium which removed the difficulties with respect to the access of financing resources and limited new financing requirements, along with the generation of increasingly high levels of cash and profits from acquired assets have been evaluated as balancing factors. In addition, the deterioration of political and economic stability in the aftermath of the general elections in June, 2015 and the accompanying rise in social tension along with the serious deterioration in emerging market currencies of the anticipated changes in the monetary policies pursued by the Federal Reserve prevented the forecasted benefits of rising revenues from rising electricity sales and led to erosions in the capital base. The deterioration in the capital base was compensated through the cash equity injection amounting TRY 160.4mn in 2015, however the ongoing depreciation of the Turkish Lira against foreign currencies will give rise to additional capital requirements in the upcoming period.

In line with the rising operational volume in the upcoming period, electricity sales are projected to constitute the largest source of revenues. The outright payment of electricity sales contributes to liquidity management while the upward demand stemming from Turkey’s rising energy requirements is expected to have a positive impact on the Company’s operations. The operationalization of other thermal and geothermal plants in the upcoming period and the re-constitution of energy prices competitively to reflect the new equilibrium that will be formed in the value of the Lira in the long term will lend support to the Company’s internal equity generation capacity and provide the means for the settlement of the debt-equity composition on a rational base.

The high levels of leverage and the USD dominated nature of the current debt burden, the nearly 30% appreciation in the value of the USD over the last 9 month period and expectations relating to the maintenance of further appreciation were the principal factors that underlie the determination of the Group’s outlook as negative.

Çelikler Taahhüt İnşaat ve Sanayi A.Ş.’s Sponsor Support grade has been determined as (2), denoting an “adequate” level, considering the Group’s sole and qualified owner Çelik Family’s financial strength and willingness to support the Company if necessary, generated employment opportunities, effectiveness, diversity of revenue streams and activities in strategic sectors. The Stand Alone grade which refers to the ability to manage the incurred risks regardless of shareholder support has been determined as (B), taking into account the Company’s internal resource generation capacity, capital and current indebtedness level.

For more information related to the rating results you may visit our internet site http://www.jcrer.com.tr or contact our analysts Mr. Şevket GÜLEÇ and Mr. Özgür Fuad ENGİN.


Administrative Board