Book building to launch for Halkbank share sale

Some 25 percent share Halkbank, headquartered in Ankara is free floating.

The Turkish government expects between 3.6 billion Turkish Liras and 4.8 billion liras of revenue from Halkbank’s secondary public offering Nov. 20. The book building will be conducted until Nov. 16 starting from today.

The proceeds from the public offering of the state-run lender will be a boon for the government as the current account deficit hit 14.4 billion liras in the first nine months of the year, exceeding market expectations, daily Radikal said yesterday. The lender sold nearly 25 percent of its shares in an initial public offering in May 2007.

The Privatization Administration (ÖİB) will sell a further 23.92 percent of shares including the additional sales right in Halkbank on the Istanbul Stock Exchange (İMKB). Ten percent of the shares will be sold to domestic individuals and corporate investors each. The remaining 80 percent will be sold to foreign corporate investors.

The price band per share has been determined as 13.8 liras and 15.9 liras. Accordingly, the privatization revenue is estimated to amount to between 4.12 billion liras and 4.75 billion liras, if the additional sales right is used, Radikal calculated. The share of ÖİB in the lender will fall to 54.15 percent from 74.98 percent after the secondary public offering, and the ratio of traded shares on the Istanbul bourse will increase from 24.98 percent to 45.78 percent without using the additional sales right.

Strong finances

The market capitalization of Halkbank is between 17.25 billion and 19.87 billion liras based on the public offering share price. “The return on equity [of Halkbank] is quite good. I think it will receive a good deal of demand,” Reuters quoted Recep Demir, a banking analyst at Garanti Bank, as saying. Halkbank’s third quarter net profit increased 19 percent to 599.9 million liras, reaching a return on equity of 25.1 percent. The shares of Halkbank closed at 15.9 liras on Nov. 12.