TURKEY: Privatisation moves forward

06 December 1996

The government's Privatisation Administration (OIB) has received offers from five ventures for consultancy services on the planned privatisation of Turk Telekomunikasyon (Turk Telekom). This is the latest move in a recent gearing-up of the privatisation programme by the government, including the invitation of bids for state institution Etibank (MEED 27:9:96).

The five ventures are headed respectively by Goldman Sachs, Lehman Brothers, Morgan Stanley, NM Rothschild and Salomon Brothers.

Privatisation of Turk Telekom is a cornerstone of the government's privatisation plans. A new telecoms law was enacted on 6 August seeking to overcome previous stalling action by political opposition through successful cases in the country's Constitutional Court. However, a new case has been opened in the court by the opposition against the

6 August legislation.

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 itself in the first half of 1997. 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 OIB has also invited bids by 12 December for the purchase of three institutions formed from the division of state Etibank. One of the new institutions is also called Etibank, and the others are Denizbank and Anadolubank. With

24 branches, Etibank has a paid-up capital of TL 2.3 million million ($23.1 million), while the other institutions each have paid-up capital of TL 1 million million ($10 million) and three branches.

The OIB is also planning to move finally with the sale of part or all of the government's 52 per cent share in Eregli Iron & Steelworks (Erdemir) on the Black Sea. The deal may be worth up to $300 million or more, depending on fluctuating valuations of Erdemir's market value.

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