Zorlu Enerji: Mind the Gap: Asset Rich, But Cash Poor – A Recovery Analysis Framework

Research evidence excerpt

Zorlu Enerji: Mind the Gap: Asset Rich, But Cash Poor – A Recovery Analysis Framework

J P M O R G A N CEEMEA Credit Research

22 June 2026

Neutral

Zorlu Enerji ZOREN

Mind the Gap: Asset Rich, But Cash Poor – A Recovery

Analysis Framework

EM CEEMEA Corporate Research

• We are Neutral ZOREN 30s (offered at 76.75, YTW 21%). Zorlu Enerji’s AC

bonds for us reflect two key issues at present : (i) in the near term, the large cash Lorenzo Parisi, CFA

burn puts into question its ability to meet the upcoming bond amortisations (44-20) 3493-3150

lorenzo.parisi@jpmorgan.com

(from October 2027); (ii) in the longer term, the high interest burden casts J.P. Morgan Securities plc

doubt on the sustainability of its capital structure and hence the 2030 bond

refinancing.

• Asset value is real, but that is the destination; it is the journey that is

weighing on the bonds. We estimate a recovery floor of ~70-76 cents (vs

bonds offered in the mid-70s), backstopped by the high-margin Generation

segment and a regulated Distribution & Retail business. On an asset-value

basis, the bonds are well collateralised in most scenarios, but recovery value

only matters once the market is forced to look at it. In the meantime, cash burn,

deteriorating liquidity and an unsustainable interest burden are driving the

bond price. Even absent a near-term credit event, bonds could drift lower

(potentially even through the recovery floor), with a weak 2Q26 print being the

next potential catalyst.

• Zorlu’s cash-flow profile is not sustainable on a run-rate basis, but the

company is sufficiently asset-rich to bridge the gap, provided execution

holds. Interest costs absorb ~60-70% of cash EBITDA and refinancing of the

bonds at current yields is a non-starter. The October 2027 amortisation (~