UPDATE - Demand Collection for Gülermak's IPO to Take Place on January 8-9-10
Foreks - Gülermak Ağır Sanayi İnşaat ve Taahhüt AŞ will hold a public offering to collect fixed price demands on January 8-9-10, 2025. The sale price per share has been set at 125 TL in the public offering to be carried out under the leadership of QNB Invest's consortium. Due to the increase in Gülermak’s paid-in capital from 300 million TL to 322 million 600 thousand TL, shares with a nominal value of 22 million 600 thousand TL will be offered as a capital increase, while shares with a nominal value of 9 million 700 thousand TL will be offered as a sale by partners. A total of 32 million 300 thousand TL nominal value shares are expected to be offered in the public offering, with a target size of 4,037,500,000 TL. In case of additional sales, it is anticipated that shares with a nominal value of 6 million 460 thousand TL will be sold through a partner sale, bringing the total public offering, including additional sales, to 38 million 760 thousand TL nominal value shares. With the additional sale, the public offering size is expected to reach approximately 4 billion 845 million TL. It is projected that the post-offering public float rate, including additional sales, will be 12.01%.
Gülermak has committed that, for one year from the date its shares start trading on Borsa Istanbul and including paid and/or unpaid capital increases, the shares that are not subject to the public offering will not be sold or subject to public offering in a way that would increase the number of circulating shares, and no decision will be made in this direction. Moreover, they will not apply to Borsa Istanbul, the Board, or any regulatory bodies, exchanges, or quotation authorities related to any securities abroad, nor will they make any announcement regarding a new sale or public offering during this period. Additionally, the shareholders participating in the public offering from Gülermak Emlak Yapı İnşaat Yatırım A.Ş. and Gülermak Emlak Turizm İşletme Yatırım A.Ş. have also committed not to sell or subject to public offering their shares that are not subject to the offering for a year from the commencement of trading, regardless of the public offering price, in a way that would lead to an increase in the number of circulating shares.
It is planned that 45-50% of the proceeds from the public offering will be used for the acquisition of machinery and equipment, 30-35% for the working capital of the PPP Project, and 20-25% for reducing financing costs. Mustafa Tuncer, a board member of Gülermak, stated that Gülermak, founded in 1958 in Ankara with steel construction manufacturing activities, has now focused on large-scale and complex construction, infrastructure, and industrial projects, continuing its path with various branches and partnerships in Poland, Romania, Sweden, Switzerland, the Philippines, North Macedonia, the United Arab Emirates (UAE), and India. Tuncer noted that they have focused on the transportation sector for the last 25 years, stating, “According to the 2022 list of Engineering News Record (ENR), a leading rating agency in the international contracting industry, we are the 13th largest firm globally in the field of 'mass transit and rail systems.’” He explained that they offer a wide range of services in transportation, including railway, metro, light rail systems, tramways, and highway projects, adding, “As of the first nine months of 2024, approximately 65% of our total revenues come from metro, light rail systems, and tram projects, 10% from railway projects, and 25% from highway projects. Additionally, other projects, which account for approximately 0.68% of our revenues, include industrial projects such as cement, sugar, glass factories, as well as designs for hydroelectric and natural gas combined cycle plants, marine, lake and river dredging, wastewater treatment plants, and drinking water lines.”
Tuncer stated that Gülermak has constructed over 300 kilometers of tunnels, 120 underground metro stations, more than 1500 kilometers of railway/high-speed train (YHT) lines, and utilized and operated over 40 tunnel boring machines (TBM). Highlighting the company’s experience with the turnkey and EPC (Engineering Procurement and Construction) model in metro and rail systems, he noted they successfully completed a total of 111 projects predominantly in Turkey, Poland, Sweden, UAE, India, and others in the last 10 years. Among these projects, well-known ones include the Istanbul Otogar-Bağcılar Rail Public Transport System, the Istanbul Metro Halic Metro (IS:METRO) Bridge, the Tandoğan-Keçiören Metro, the Ankara High-Speed Train Station Complex, and the Mecidiyeköy-Mahmutbey Metro Line Construction Works. Regarding the projects they have undertaken between 2021 and September 2024, he commented:
“Our activities are essentially grouped into three geographic categories. The projects under the West Group, encompassing Poland and Sweden, account for approximately 49% of our revenues as of the first nine months of 2024. The revenues of the West Group are primarily from projects such as Warsaw Metro Mory, S7 Express Road, S52 Highway Project, and Krakow High-Speed Tram Operations Project, located in Poland. The East Group, from which we obtained about 22% of our total revenues, encompasses all our overseas activities that do not fall within the Western contracting group's operational area, including Romania, North Macedonia, the Philippines, UAE, and India. In this group, we have completed certain phases of our Pune Metro, Kanpur Metro, and Surat Metro projects in India, while processes are ongoing in projects such as Bucharest Metro and Cluj Metro in Romania. In the last project group in Turkey, construction is ongoing on our projects, including Izmir Buca Metro.”
Net profit amounted to 2.67 billion TL in the first nine months of the year. Tuncer provided information about Gülermak’s financial results for the first nine months of 2024, stating, “We closed 2023 with a revenue of 24 billion 900 million 529 thousand 383 TL. Our revenue, which was 16 billion 33 million 130 thousand 36 TL in the first nine months of 2023, increased by 32% to 21 billion 183 million 440 thousand 883 TL in the first nine months of 2024. Our gross profit, which was 2 billion 613 million 928 thousand 141 TL in 2023, reached 2 billion 706 million 527 thousand 899 TL in the first nine months of 2024.” He noted that the net income for the first nine months of 2023 was 397 million 902 thousand 741 TL, which amounted to 2 billion 666 million 468 thousand 956 TL in the first nine months of 2024, further stating:
“We will strengthen our position in Turkey and globally.” "We continue on our path with the goal of raising Gülermak's position in its field every day in Turkey and globally. We will further enhance our extensive service range in the transportation sector and our widespread customer portfolio in the international arena with our new investments. The revenue we will obtain from the public offering will also empower us in this regard. We plan to use a significant portion of the public offering income to purchase machinery and equipment that will strengthen us in new projects. Additionally, we will allocate part of the public offering funds, which will reduce our financing costs, as working capital for our public-private partnership project."