Turkey: Wind Of Privatization Continues

The block sales of 56.67% shares of Başak Sigorta and 41% shares of Başak Emeklilik were finalized on 16 May 2006, following the execution of the share transfer agreement between the PA and Groupama International. The share sale price under this agreement was $ 268 million.

The Competition Board rejected the transfer of the operation rights of Iskenderun Port to the PSA (Singapore) - Akfen (Turkish) Consortium on the ground that such transfer would create a dominant position for the group in the same market since they already held the operational rights to Mersin Port. This decision of the Competition Board has been brought before the Council of State by both the winning bidder and the employees of the Port Union with different claims. The PA will need to wait until the disputes are resolved before accepting the second bid. As for the privatization of Samsun Port, the PA has not yet decided upon the winning bidder after receiving two offers, in June 2006, from two Turkish companies.

The privatization of THY through offering its shares to the public has been completed with great success, where the issuers sold an additional 15% of the shares over the intended 25% of THY shares. Accordingly, 53.57% of the shares of THY are currently held by public, and the total revenue obtained from this sale reached an aggregate amount of 310.6 million YTL, which is of the sum of 117.6 million YTL obtained from foreign investors and 193 million YTL obtained from local investors. Very recently, together with Do&Co, an Austrian Company, THY purchased the food and beverage services company (USAŞ) that catered airlines for a sum $ 45 million. It is expected that approximately 1400 employees of USAŞ will be transferred to the joint venture of THY / Do&Co.

In the mining area, the PA completed its negotiations with Kollin İnşaat Turizm Sanayi ve Ticaret A.Ş on 12 September 2006. Kollin offered to pay $ 21.5 million for the privatization of the Deveci Mining area owned by Türkiye Demir ve Çelik İşletmeleri A.Ş. The PA also signed a sale and transfer of rights agreement with Eti Bakır A.Ş on 6 July 2006 for the transfer of the operation rights of the Murgul Mining area to Eti Bakır A.Ş, together with all of its licenses, previously owned by Karadeniz Bakır İşletmeleri A.Ş. The said mining area included a hydro-electric power plant on its premises, which was also transferred to the winning bidder within the same privatization package to operate it for a period of 36 years and the real property in the Samsun area owned by Murgul Mining. The total price paid by Eti Bakır A.Ş for the above transactions was announced by the PA as $ 37.6 million.

Currently, the PA is busy with the proposed privatizations of Halkbank, and Petkim, while setting the deadlines for the final bidding of Izmir Port and the Bor, Ereğli, Ilgın and Kayseri Şeker Fabrikası (sugar processing factories) owned by Sümer Holding A.Ş.

Halkbank, being one of the largest banks in Turkey, has been included into the privatization portfolio upon the decision of the Privatization High Council ("PHC"), dated 11 August 2006. Pursuant to the PHC’s decision, the shares of Halkbank owned by the Treasury, which is almost equivalent to 99% of Halkbank’s shares, will be privatized through block sales until 25 May 2008. A number of foreign players are expected to be interested in buying Halkbank, Turkey’s sixth largest by assets. Investors from the Gulf, as well as from Europe and America, are said to be interested, including the Dubai Investment Group as well as Citigroup.

Halkbank is Turkey’s leading finance provider to small and medium-size enterprises, and has more than 550 branches. Beyond the shares owned by the Treasury, a few shares are split between other banks, certain chambers of commerce and local administrations. The government has used Halkbank as a vehicle to bring about reorganization of the banking sector in recent years. In 2004, Halkbank acquired Pamukbank, which had been managed by the Savings Deposit Insurance Fund since it collapsed in June 2002, giving it extra corporate and retail exposure. Halkbank also acquired Turkiye Emlak Bankası in 2001, Etibank in 1998, Sumerbank in 1993 and Tobank in 1992.

The current government and the PA have taken advantage of the foreign appetite for Turkish banks by approving the privatization plan. In April, Citigroup and the National Bank of Greece fought over a stake in Finansbank, with the National Bank of Greece paying 2.3 billion for 46% of Finansbank’s shares, valuing it at about 3.6 times its book price, setting a new benchmark for Turkish bank acquisitions. Belgium’s Dexia also agreed to a deal earlier this year, paying $2.44 billion for a 75% stake in DenizBank, Turkey’s 10th largest bank, valuing the bank at $3.25 billion. Despite this appetite, there has been a negative response from Turkish public opinion especially from the minority shareholders of Halkbank.

The Ankara Chamber of Commerce, a minority shareholder in Halkbank, has filed a lawsuit against the PA before the 13th Chamber of the Council of State, requesting cancellation of the PHC’s decision in connection with the privatization of Halkbank and obtained a suspension order in this regard.

Following the suspension order, an amendment was made by the Parliament on Law No. 403 on Ziraat Bankası, Halkbank and Emlak Bank. With this amendment, the restructuring period (which was the basis of the suspension order) was increased to ten years. Consequently, the suspension order is likely to be lifted. Following the said amendment, the PHC has adopted its resolution regarding the privatization strategy to be followed in the privatization of Halkbank.

With regards to Petkim, the PA has recently signed a consultancy services agreement with AK Yatırım Menkul Değerler A.Ş / Raiffeisen Inv. AG consortium to act as the consultants to the PA in determining the privatization method and process for Petkim. As our readers may know, this privatization was previously attempted on two occasions, in 2001 and 2003. Petkim is a petrochemical giant located in İzmir Aliağa.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions