The government’s privatisation programme has become shrouded in controversy following the disputed sale of the state’s stake in the steel maker Metas. The dispute follows the recent collapse of a deal with the Iran’s Nadir Impex for the purchase of tyre maker Petlas. However, the government has reacted angrily to mounting criticism that its privatisation programme is behind schedule.
The government has decided to sell its 42.5 per cent stake in the Izmir- based Metas to Rumeli Celik Sanayi. However, the $57.9 million offer for Metas has been described as a ‘slap in the face’ by a rival bidder, the Izmir-based Yasar Holding. Metas workers joined the fray by staging protests against the sale to Rumeli Celik Sanayi and have appealed to the government for Metas to be sold to an Izmir-based company.
Rumeli Celik Sanayi is a subsidiary of Rumeli Holding, owned by the Uzan family, which has a reputation for aggressive takeover bids. The company has benefited from the privatisation programme and since late 1992 has gained control of the electricity company, Cukurova Elektrik, an automotive company, and also five cement plants. The automotive company was subsequently closed down and workers were laid off from the cement plants.
Italian contractor Astaldi also withdrew from its main civils contract for Cukurova’s World Bank-supported Berke dam project in the of summer 1994, claiming large arrears in payments.
In the sale of Petlas, the higher privatisation council has cancelled the deal with Nadir Impex when it failed to come up with an advanced payment on the $65 million asking price. However, Turkish press reports say that the government has cashed a TL 1 million million ($23.6 million) letter of guarantee provided by the Iranian firm. The government has not yet commented on the reports but has said that Petlas will be offered again for sale in the near future.
The aborted Petlas deal follows the collapse in negotiations with the local Cingilli Holding for a block sale of 60 per cent of Sumerbank. Talks ended after the government rejected Cingilli’s final offer of about $45 million (MEED 14:4:95).
At the end of April, the only major successful deal in the government’s ‘accelerated’ privatisation programme was of a block sale of 60 per cent in the airports ground handler Havas to the local Yazeks Trade & Industry for $36 million. However, the sale contributes little to the government’s target of $5,000 million for privatisation revenues in 1995.
The successful implementation of the privatisation programme is a key concern for the World Bank and IMF – the latter has recently approved an extension of its stand-by facility. The IMF is anxious to see a major privatisation deal in place soon to underpin its programme in the country.
A second round of negotiations wasto start on 28 April for the sale of the government’s 51 per cent stake Eregli Iron & Steelworks, which is expected to raise about $180 million.
However, the deal has provoked strong opposition from management and workers. The government has also to decide on a date for the issue of invitations to bid for Pertrol Ofisi, the refined products distributor, and the refineries operated by the Turkish Petroleum Refineries Corporation (Tupras).
However, legislation has been approved by parliament for the sale of Turk Telecom, a newly formed company carved out of the giant posts, telegraphs and telephone (PTT) administration (see below).
The Privatisation Administration’s (OIB) announcement on 24 April that the government would sell minority holdings in various companies caused the Istanbul stock exchange index to fall by about 10 percentage points on fears of dumping.
The OIB has managed to counter these fears and has now invited bids for the sale of 30 textile factories affiliated with Sumer Holding which, when working under the name of Sumerbank, was part of a huge conglomerate dealing in textiles, leather and ceramics.
The government has reacted angrily to reports that its privatisation programme was behind schedule. ‘Privatisation is continuing efficiently at its maximum speed,’ State Minister Ali Sevki Erek said in late April. ‘It is not possible to adopt arguments that privatisation is a fiasco.’