China Merchants Seeks Majority Stake in Turkish Bridge Project

(Bloomberg) -- China Merchants Group Ltd. is in talks to buy a majority stake in a Turkish bridge operator that ailing Italian builder Astaldi SpA is exiting, according to people with knowledge of the matter.

The state-owned Chinese conglomerate is negotiating over the stake with Istanbul-based IC Yatirim Holding AS, said the people, who asked not to be identified because talks are still ongoing and may not result in a deal. Astaldi, which has previously said it owns 33% of the project, announced this week it is selling its portion to IC Yatirim, giving the Turkish firm 100% of the venture.

Representatives for IC Yatirim and Hong Kong-based China Merchants Group declined to comment.

China Merchants Group and IC Yatirim are in talks with lenders to refinance a $2.3 billion loan, people familiar with the matter said in September. The loan was taken out in 2013 to build a suspension bridge and connecting roads across the Bosporus strait in Istanbul, Turkey's most populous city.

At that time, parties to the deal were discussing a valuation of about $1 billion to $1.2 billion as the total equity value of the asset, though the final price hinges on the new debt terms, those people said. Astaldi, which is being taken over by another Italian builder Salini Impregilo SpA, is divesting from the project as part of an agreement with court administrators overseeing its creditor-protection process.

The partners have been operating the toll bridge since it opened in 2016 after an investment of about $3 billion. They won backing from the government earlier this year to adjust the exchange rate used to calculate the toll twice a year, instead of once a year, people familiar with the decision said in May.

To contact Bloomberg News staff for this story: Taylan Bilgic in Istanbul at tbilgic2@bloomberg.net;Ercan Ersoy in Istanbul at eersoy@bloomberg.net;Kerim Karakaya in Istanbul at kkarakaya2@bloomberg.net;Vinicy Chan in Hong Kong at vchan91@bloomberg.net

To contact the editors responsible for this story: Stefania Bianchi at sbianchi10@bloomberg.net, Vernon Wessels, Alastair Reed

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With assistance from Bloomberg