JCR Eurasia Rating in its periodic review, has evaluated the ratings of the consolidated structure of Gama Güç Sistemleri Mühendislik ve Taahhüt A.Ş. in an investment grade category and affirmed the Long Term National Grade and outlook as “BBB+(Trk)/Stabl

JCR Eurasia Rating has evaluated the credit ratings of the consolidated structure of Gama Güç Sistemleri Mühendislik ve Taahhüt A.Ş. in an investment grade category and affirmed the Long Term National Grade and outlook as “BBB+ (Trk) / Stable” and Long Term International Local and Foreign Currency Grades and outlooks as “BBB- / Stable”. The details of the credit ratings are provided in the table presented below. As there are no additional legal and/or financial collateral guarantees that will be provided separately for the repayment of the bond/bill that may be issued by the Gama Güç Sistemleri Mühendislik ve Taahhüt A.Ş. in the following periods, the note assigned for the TRY dominated bond issuance will be assigned as the same as the Company's Long and Short Term National Local Ratings.

Long Term International Foreign Currency


BBB- / (Stable outlook)

Long Term International Local Currency


BBB- / ( Stable outlook)

Long Term National Local Rating


BBB+ (Trk) / (Stable outlook)

Long Term National Issue Rating


BBB+ (Trk)

Short Term International Foreign Currency


A-3 / (Stable outlook)

Short Term International Local Currency


A-3 / (Stable outlook)

Short Term National Local Rating


A-2 (Trk) / (Stable outlook)

Short Term National Issue Rating


A-2 (Trk)

Sponsor Support



Stand Alone



GAMA Güç Sistemleri Mühendislik ve Taahhüt A.Ş. (“Gama Güç Sistemleri”/”GGS”) is a GAMA Holding subsidiary specialized in Engineering-Procurement-Construction (EPC) contracts of power plant projects. Since 1959, Gama Group companies organized under Gama Holding A.Ş.; GAMA Endüstri Tesisleri İmalat ve Montaj A.Ş., GAMA Enerji A.Ş., GAMA International BV, GAMA Güç Sistemleri Mühendislik ve Taahhüt A.Ş. and GAMA Ticaret ve Turizm A.Ş., have undertaken the construction of power plants, refinery, cement, petro-chemical and gas plants, factories, high-rise buildings, water treatment plants, transmission lines, bridges, and other infrastructural constructions along with having stakes in various energy investments.

Gama Güç Sistemleri’s structure integrates engineering, procurement, construction, initial operation and spare part support services to provide the most efficient services to its power plant investor clients. In this manner, GGS offers its clients a complete turnkey package for any type of power plant investment and successfully competes with global EPC companies. In addition to conventional and combined cycle natural gas power plants, GGS also designs power plants using other thermal resources or renewable energy sources and is able to harness different power sources together, thus creating synergies. GGS is currently active in Turkey, the Middle East, North Africa, Europe, and the CIS region. By monitoring the global energy supply and demand balance through regional segments, the Company develops its growth strategy based on the analysis of medium to long term potential bearing markets. GGS’s business volume displayed an increase on the back of projects awarded to the Company on solo basis or to the international consortiums, while the Company was performing 10 projects simultaneously as of the end of 2015 and August-end 2016.

Gama Güç Sistemleri carries out business development activities and contemplates viable access strategies to potential markets so as to pursue EPC projects, which is the Company’s core competence area, and hence is faced with intensive competition from global scoped firms in a wider geography. Considering the ongoing and pipelined projects, bidding expertise and comprehensive business development efforts, GGS is expected to maintain its growth trend in the following periods. The energy supply and demand balance and the economic growth pace of the regions in which the Company operates have a considerable impact on GGS’s business prospects. In this sense, although the Turkish energy market is showing a slowdown, the positive prospects in the medium to long term in the CIS region, Middle East, Sub Saharan Africa, South East Asia, South and North America, and Russia in particular support the Company’s operational activities. GGS and its parent group’s track record, the ability to develop and complete sophisticated projects on solo basis and as a member of international consortiums, turnkey project delivery competence, the size of ongoing projects, intensive use of external resources increasing the overall leverage level, strong competitive environment in the sector, and economic and political risks prevailing in the core markets of GGS form the foundations of the Long Term National Rating of “BBB+” and “Stable” outlook.

The only non-core project contracted to the Company, the “Disi Mudawarra-Amman Water Pipeline Project”, for the construction of 345 km steel water pipeline to Amman, Jordan’s capital city, has a transfer capacity of 100 million m3 of drinking water annually. The project’s investor and GGS’s employer “Disi Water Private Shareholding Co. Ltd.” (DWC) is partially owned by Gama Energy. The facility became operational in January 2014 with DWC receiving a 25 year concession from Jordan Ministry of Water and Irrigation. However, political force majeure and certain problems stemming from the Jordan Ministry of Water and Irrigation resulted in delays in the project schedule and additional costs and financing expenses. The complete losses arising from the project are reflected in the financial statements as of FYE2013 and the Company expects that the arbitration process and its compensation claims will be completed by the end of 2017. In case of the finalization of the arbitration process in line with the Company expectations is expected to create a very significant cash inflow to the Company, which is expected to justify an upward revision of the current ratings due to the further strengthening of the Company’s financial structure, is among the prioritized matters to be monitored by JCR-ER in the following periods. In addition, the robust increase in GGS’s financial debts in FY2015 due to the financing of ongoing projects and the transfer of funds to Group companies for funding purposes has resulted in a significant increase in the Company’s leverage as of 2015 year-end. However, the usage and monitoring of financial loans for each project separately makes the monitoring and control of loans easier for the Company.

The increase in leverage and its potential effects on the Company’s liquidity management, successful progression of ongoing and new projects carried out in regions with political and economic uncertainties, the impact of the volatility in interest and foreign exchange rates and the possible effects of the risk and opportunities to arise out of restructuring process of the state organs following the failed coup attempt as well as the lengthening of the state of emergency declared in Turkey will be the factors to be closely monitored by the JCR-ER in the following periods for the reassessment of the assigned rating grades and outlooks.

Considering the size of the Company’s ongoing and contracted projects, the geographical reach of activities, employment opportunities, experience in the sector, and the significant cash capital injection realized in 2014; it is considered that the primary shareholder, Gama Holding, has the willingness and the financial capacity to provide financial and operational support to the Company if needed. In this regard, the Company’s Sponsor Support Grade is determined as (2) within the JCR-ER Rating scale, denoting an adequate level. Accounting for the Company’s internal resource generation capacity, the Stand Alone Grade, which demonstrates GGS’s ability to meet its commitments and obligations through its internally generated resources without resorting to its shareholders has been affirmed as (B) within JCR-ER Rating Scale, corresponding to an adequate service level.

For more information related with the rating results you may visit our internet site http://www.jcrer.com.tr or contact our analyst Mr. Ozan SIVACI.


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