JCR Eurasia Rating affirmed A-(Trk) with Positive outlook for the consolidated structure of Ortadogu Enerji Sanayi ve Ticaret A.Ş. on the Long Term National Local scale and BBB- for its Long Term International FC and LC ratings

JCR Eurasia Rating has affirmed the credit ratings of ‘A- (Trk)’ with Stable outlook on the Long Term National Scale to “Ortadogu Enerji Sanayi ve Ticaret A.Ş.” and „A-1 (Trk)‟ on the Short Term National Scale. JCR Eurasia has also affirmed ‘BBB-’ for the Long Term International Foreign and Local Currency ratings. Other notes and details of the ratings are given in the table below:

Long Term International Foreign Currency

:

BBB- /(Stable Outlook)

Long Term International Local Currency

:

BBB- /(Stable Outlook)

Long Term National Local Rating

:

A- (Trk) /(Positive Outlook)

Short Term International Foreign Currency

:

A-3 /(Stable Outlook)

Short Term International Local Currency

:

A-3 /(Stable Outlook)

Short Term National Local Rating

:

A-1 (Trk)/(Stable Outlook)

Sponsor Support

:

2

Stand Alone

:

B

Ortadogu Enerji maintains its operations, which commenced in 2009 in Turkey through electricity production from biogas resources, in the renewable energy segment of the energy sector. In addition to innovative and pioneering investments realized in the field of landfill gas energy, further growth in the sector is targeted in the periods to come through investments planned in the field of conventional energy.

Profitability indicators having reached ample capacity for internal equity generation resulting mainly from relatively low production costs of electricity sales and significant improvement in capitalization level in this respect, sustained growth performance, terms of electricity sales despite high concentration values on client basis ensured by its regulated operations facilitating liquidity management by supporting predictability of revenues and being a pioneering firm in its segment through its innovative implementations together with noteworthy R&D efforts involving cooperation with academia with a view to enhancing sustainability were the primary factors in the assignment of the Company’s notes.

Growing energy needs of Turkey ensuring strong demand for electricity production business, which promises further growth potential for the sector, accumulation of carbon offset credits expected to provide the Company with incremental revenues in the future periods, sustained capacity of high profitability and established borrowing mechanisms were the other matters bolstering Stable outlook of the Company’s current notes and revision of outlook in the Long Term National scale to Positive.

Pressure to be exerted on profitability indicators by declining but continuing interest rate risk of floating-rate bank loans in view of interest rate volatilities and partial exposure to foreign currency position confined to time lags between repayment dates of loans and collection dates together with planned investments in conventional energy sector and its effects in the Company’s balance sheet and revenue generation capacity will continue to be monitoring issues for further assessments in the following periods.

In addition to the JCR Eurasia Rating‘s opinion that the controlling shareholders Ortadogu Grup and Yeşil Holding have the willingness and financial strength to supply long term liquidity or equity for and the adequate experience to provide efficient operational support to Ortadogu Enerji, taking into account the fact that the revenue earning activities of the Company and conditions related to these are determined by laws and regulatory authorities, the Sponsor Support note of Ortadogu Enerji has been affirmed as (2).

Regarding current revenue streams, established borrowing mechanisms and profitability level generating internal equity, it is considered that Ortadogu Enerji and its managerial staff have reached the level of adequate experience and facilities to manage its obligations even in case the shareholders do not provide any assistance. Within this context, the Stand Alone note of Ortadogu Enerji has been affirmed as (B) in the JCR Eurasia Rating notation system.

For more information regarding the rating results you may visit our internet site http://www.jcrer.com.tr or contact our analyst Mr. Zeki M COKTAN.

JCR EURASIA RATING

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