TURKEY: Privatisation speeds up

18 February 1994

Negotiations about the privatisation of the government's stake in the Eregli Iron & Steelworks (Erdemir) are under way between Credit Suisse First Boston (CSFB) and the Public Participation Administration (KOI), which handles the privatisation programme.

The KOI was expected to announce details of the 1994 privatisation programme on 10 February (MEED 4:2:94, page 30). A new mood of urgency has entered the programme following January's foreign exchange crisis, which exposed the dangers of the higher budget deficit (MEED 11:2:94).

The government expects to raise about $500 million in early March from the sale of state shares stake in automotive market leader and Fiat licensee Tofas and its retailing arm, Tofas Oto. The sale on domestic and international markets will be arranged by two consortia, of Shroders with the local Interbank, and Lehman Brothers with the local Finansbank. A smaller sale of state-run Sumerbank in March or April could raise about $100 million.

Measures being considered for the programme include reorganising the KOI, preparing new privatisation and anti-cartel laws, and reshaping sales procedures to bring deals to the markets more quickly.

The negotiations with CSFB are over the fifth and final stage of its studies on the privatisation of Erdemir, as provided for in an agreement with the institution in the late 1980s.

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