TURKEY: New coalition government makes first privatisations

12 April 1996

The first sales of state assets have been concluded since the formation of a new coalition government in March pledging sweeping denationalisation. The largest deal is for the $14 million sale of zinc smelter Cinkur to the local Kayseri Maden Metal Ticaret (KMM).

KMM is a venture formed by the Iranian Mines Ministry with an 85 per cent share, Canada-based Isko with 10 per cent and the local Ekin Madencilik with 5 per cent.

Payment terms are $7 million in advance and the remainder in two equal instalments at sixmonth intervals, subject to interest of 2.5 per cent over the London interbank offered rate (Libor).

With output of 18,760 tonnes of electrolytic zinc, cadmium and related alloys, Cinkur met one third of Turkey's overall demand for zinc in 1995, according to its deputy general manager, Turgut Gozubuyuk. The company's annual production capacity is 33,650 tonnes, but at present it is forced to sell all its output in the domestic market because its prices are higher than those on the London Metal Exchange, he adds. Evaluation of only three bids returned in November was protracted due to December elections and the formation of the new government, officials say.

In other deals supervised by the government's Privatisation Administration, three Boeing-727 aircraft, formerly owned by Turk Hava Yollari (THY - Turkish Airlines), have been sold for $9 million to the local Top Air, and another THY aircraft will be transferred to Turkish Cypriot Airlines at a price of $2.1 million. Finally, a tanker, formerly owned by state refined products distributor Petrol Ofisi, has been sold for $1.06 million to the local Gemi Insaat Bakim.

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