TURKEY: Bids in for steelworks privatisation

17 February 1995

Offers have been received from eight bidders for the government's 51.66 per cent share in the Eregli Iron & Steelworks (MEED 10:2:94). The block sale to a strategic investor is expected to fetch up to $180 million.

The bidders are:

Koc Holding

May Madencilik

Nippon Denro Ispat

Rumeli Metal Sanayi

Colakoglu Metalurji, a venture with Cukurova Celik Endustri, IZDAS, Ekinciler Demir Celik, Habas Endustri, ICDAS, Cebitas, Kroman Celik Sanayi, and METAS

a venture of Bayindir Holding, OYAK and the Erdemir Foundation

a venture of Ertugrul Kurdoglu, Borusan Holding, and USX Engineers & Consultants

a joint venture of Huseyin Bayraktar Holding and Global Securities on behalf of Balli Group.

Foreign partners to the local bidders have not be disclosed by the privatisation administration (OIB). However, Turkish press reports say that foreign partners include British Steel, Japan's Marubeni Corporation, and India's Tata.

Inflation spiral causes concern Soaring inflation has caused widespread concern about the country's future economic development. In the year to the end of January, consumer prices had risen by 130.6 per cent. Wholesale prices rose by 156.8 per cent, the first time they had risen by more than 150 per cent in one year.

The inflation figures were well above IMF targets in the $742 million standby facility it approved last July. Revised targets of 37 per cent inflation and 3.8 per cent growth in 1995 are to be included in a new letter of intent to be handed to the IMF. These figures compare with 22.5 per cent inflation and 4.4 per cent growth originally pledged to the fund.

After discussions with the IMF in early January, the government increased consumption taxes on petroleum products by 12-24 per cent. Other rises in indirect taxes are expected to follow soon.

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