TURKEY: New privatisation era pledged

27 September 1996

A new era for the privatisation programme was promised by Prime Minister Necmettin Erbakan on 11 September 'It will be an era of transparency and speed,' he pledged, before chairing the first meeting of the government's Higher Privatisation Board since the end of June formation of his Islamist-led coalition.

An accelerated schedule will be drawn up covering the remainder of 1996 and 1997.

Privatisation proceeds amounted to $287 million in first-half 1996, compared with a target of about $2,000 million for the year, according the government's Privatisation Administration (OIB). The political turbulence following December's elections largely accounted for the slow progress.

One of the key sales to be revived will be that of Turk Telekomunikasyon (Turk Telekom), says State Minister Ufuk Soylemez. responsible for privatisation A new telecoms law was enacted on 6 August seeking to overcome stalling action by the opposition using the Constitutional Court.

Licences for services such as cellular phones will be issued by the end of 1996, before the sale of an initial 10-15 per cent portion of Turk Telekom in first-half 1997, according to Soylemez. The initial portion of Turk Telekom will raise about $3,000 million, taking into account the company's total estimated worth of $20,000 million, the minister had said previously.

A consultant will be selected from shortlisted consortia at its next meeting of the board soon, Soylemez also says. Six consortia returned final offers in December 1995. They were:

Banque Paribas, Kleinwort Benson and Bear Stearns & Company Goldman Sachs, Lazard Freres, UBS, Barclays de Zoete Wedd and Nikko Securities J JP Morgan & Company, NM Rothschild and Merrill Lynch J Lehman Brothers, Nomura Securities, Deutsche Bank and Morgan Grenfell Morgan Stanley, SG Warburg, Citibank and Yamaichi Securities Salomon Brothers, Banque Indosuez Capital Markets, Daiwa Securities and Schroder Securities.

Action will also be taken soon on the sale of Black Sea steel maker Erdemir and state institution Etibank, among up to 130 state enterprises awaiting sale by the OIB, Soylemez says.

The government is planning to use privatisation revenues to provide bridging finance in a new instrument to ease the burden of domestic debts, according to the semi-official Anatolia news agency. The government also hopes to solve the drain of loss-making state enterprises on the exchequer by pooling all their finances in one central account. This will enable utilisation of idle funds held by some enterprises to meet the funding needs of others, according to officials.

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