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May 2010 | ifr special report | 11 PRIVATISATION


The government may be ready to sell its remaining stake in Turkish Airlines


Likewise government owned Halk Bank is receiving attention. It is already 25% listed and the government has appointed Goldman Sachs to examine whether to try and sell the remaining 75%, either publicly or to a strategic buyer. Given that most strategic buyers would be foreign banks or private equity firms, it is likely that the government would need to go the public offering route.


Most privatisation activity has so far come from the electricity sector, with 20 regional distribution companies already in the process of being sold and the sale of Turkey’s generation assets in the consulta- tion stage. In the distribution sector, eight


regional companies that are part of the Tedas group have already been sold. The two biggest of these were the Bedas (Bashkent Electricity Distribution) and Sedas (Sakarya Electricity Distribution) deals.


In mid February, four more distribution companies - Uludag network, the Camlibel grid near Sivas, the Firat grid in the Eastern province of Malatya and the grid around the Eastern City of Van - were sold. From 42 pre-qualified, three Turkish companies emerged victorious: Limak Group bought the Uludag Grid for US$940m; Kolin Insaat bought the Camlibel grid for US$285m; and Aksa Elektrik Perakende Satis paid US$330m for Firat and Van.


Privatisation implementations, 1985–2010 US$bn


9 8 7 6 5 4 3 2 1 0


85-97 98 99 00 01 Source: Republic of Turkey Prime Ministry Privatization Administration 02 03 04 05 06 07 08 09 10


On the generation side, the privatisa- tion authority originally put all the country’s thermal and hydro power assets into a company called EU AS. This portfolio was then divided into six smaller portfolios but none of these received much market interest. It was then decided to put them all back into portfolio containing 45 generation assets and begin a new sale process through Citi and local firm Oyak Securities. Market sources suggest that this new company is ideal for an IPO as it is a sector that is easy to understand, where revenues are stable and the companies can afford to pay dividends. But it would be a massive undertaking.


Most privatisation activity has so far come from the electricity sector, with 20 regional distribution companies already in the process of being sold and the sale of Turkey’s generation assets in the


consultation stage.


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