Growing chain of delayed offerings

Hurriyet Daily News with wires

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Hit by the global financial downturn, another Turkish company announced it was postponing a planned initial public offering, or IPO, to next year.

Bülent Bingöl, chairman of Mesa Gayrimenkul Yatırım Ortaklığı, a real estate investment trust, on Wednesday said the firm will apply for a postponement for its planned IPO to the Istanbul Stock Exchange.

"We think that by the second half of 2010, a window might be opened and we may realize the IPO," Bingöl told Anatolia news agency on the sidelines of the second day of the REState summit in Istanbul.

Mesa is the latest chain in a global trend, as 2008 became a barren year for IPOs worldwide. Compared to 2007, global IPO activity both in the number of deals and funds raised plummeted more than 60 percent last year.

Due to the global liquidity crunch, companies worldwide need IPOs more than ever to strengthen and expand, but the same liquidity crunch has reduced investor interest to stock markets so much that as stocks plummeted, IPOs were postponed.

In Turkey, planned IPOs such as Kuveyt Türk, an Islamic lender, Albayrak REIT, Martı REIT, and Probil, an information technology company, have been postponed. Mesa REIT became the latest ring on a growing chain.

Mesa's portfolio

With a portfolio size of 450 million Turkish Liras, Mesa REIT ranks fourth compared to currently listed REITs. The portfolio includes Capitol Shopping Center, Mesa Project and Mesa Dora Houses in Istanbul and Ankara.

The firm also has 160,000 square meters of land stock in Istanbul’s Bahçeşehir ready for new housing projects. Half of Mesa’s portfolio consists of shopping centers, while housing projects and land account for 30 percent and 20 percent, respectively.

As the company was founded with a capital of 32 million liras, it has to be listed at the Istanbul Stock Exchange in one year. "If the economic conjuncture is not suitable, this period can be postponed," Bingöl said.

Postponement application

"We will apply for postponement, but we think a window may be opened by the second half of 2010."

The firm added its 2008 profits to its capital, reaching a capital strength of 49 million liras. The 14 REITs trading at the Istanbul Stock Exchange are 50 percent undervalued, according to Bingöl. "If this picture changes, it will be an indication that losses are closed," he said.

According to the "Global IPO Trends 2009" report by Ernst & Young, global IPO activity in 2008 fell by 61 percent in deal numbers and 67 percent in funds raised. Throughout last year, the financial, energy and materials sectors raised the most IPO capital, while real estate, health care and technology IPOs declined 90 percent on average.

Türk Telekom, Turkey’s largest fixed-line phone company, raised $1.92 billion in an IPO last year, scoring the ninth biggest IPO in the world. The top IPO of 2008 was Visa from the United States, which raised nearly $20 billion in March, defying adverse market conditions.

Meanwhile, Turkey’s Capital Markets Board, or SPK, on Wednesday said it planned to change the rules on minority tender calls and invited comments on a draft set of new regulations. The draft on the Ankara-based regulator's Web site would oblige a call if voting rights exceed 50 percent, compared to 25 percent at present, Bloomberg reported.