Turkey sees largest share sale ever in Halkbank privatization

ISTANBUL – Reuters

DHA Photo

Turkish markets saw the largest stake sale in history as the 20.8 percent share offer of state-run Halkbank raised 4.5 billion Turkish Liras ($2.5 billion). This was the third-largest public offering across Europe this year following Italian lender UniCredit’s $9.9 billion rights issue in January and Russia’s sale of a $5 billion stake in Sberbank in September. The privatization received a large investment from foreign buyers, particularly from those in the U.K.

The government sold the 20.8 percent Halkbank stake for 15.1 lira a share, managing broker FinansInvest said in a filing to the Istanbul Stock Exchange (İMKB), nearing the highest offer range of between 13.80 and 15.90 lira.

The success of the share-sale privatization method came after the government’s failed attempts to sell a number of power and gas grids in blocks.

“The confidence of national and international investors in our country has played an important role in this success. ... The timing was very good,” Reuters quoted Finance Minister Mehmet Şimşek as saying yesterday.

He said at an Istanbul press meeting that the bids for the sell-off had totaled 11 billion liras.

Some 80 percent of the shares went to foreign investors, Şimşek noted, adding that for the first time Turkey had managed to attract investments from the Middle East.

The demand from London reached 55 percent, as the U.S., Singapore and Europe followed with 20 percent, 9 percent and 3 percent respectively, the minister said.

Following the sale, Turkey’s share in Halkbank fell to 51 percent from a previous 75 percent while the free float rose to around 49 percent from 25 percent.

Şimşek said no block sale of Halkbank shares was on the agenda currently but this was possible in the medium or long term.

Şimşek also said a study was ongoing on the further privatization of Türk Telekom, the country’s landline operator also very active in the Internet services business. “But I do not want to mention an exact date,” he said.

Whether via a public offering or with another method, the process would be transparent, he said. This would be a smaller stake sale, he noted.

Oger Telekomünikasyon holds 55 percent of the company and 30 percent is owned by the Turkish Treasury. The rest is free floating.

Commenting on recent talks between Turkish Airlines, the country’s largest air carrier, and Lufthansa on deeper cooperation, Şimşek said this did not include a share sale. No privatization of the company was being considered, he added. The controlling shares of the carrier are free floating, and the state holds 49 percent.

Turkey regained an investment-grade credit rating from Fitch on Nov. 5 in a move long coveted by Ankara.

It is hoping one of the two other major rating agencies – Moody’s or Standard & Poor’s - will follow suit, which could enable it to join benchmark investment grade bond indexes, a status many funds require before investing, Reuters said.