Eurobank sells stake in Turkey

ISTANBUL - Hürriyet Daily News

A man walks next to policemen outside a Eurobank branch in Athens on March 21. Eurobank sells its stake in its Turkey unit REUTERS photo

Eurobank, the third-largest Greek bank, said yesterday it had agreed to sell 70 percent its Turkish subsidiary Eurobank Tekfen to Kuwait’s Burgan Bank, as the total value of the unit is calculated at 272.7 million euros ($359 million).

“Under the terms of the transaction, Burgan will acquire 99.3 percent of Eurobank Tekfen from Eurobank EFG and the Tekfen Group for an upfront cash consideration of 641 million Turkish Liras,” Agence France-Press quoted a Eurobank statement issued yesterday. The statement added that the deal, scheduled to be completed in the third quarter of 2012, would increase the Greek group’s core tier I capital by almost 300 million euros and improve its liquidity position by 800 million. The deal is subject to regulatory approval.

Tekfen’s 30 percent stake

Greek banks have been trying to bolster their shareholder funds after the government accomplished a bond swap in March that canceled nearly a third of its huge debt. Eurobank Tekfen’s General Manager Mehmet Sönmez said yesterday that 70 percent of the bank has been sold to Burgan Bank, and the two parties will negotiate on the remaining 30 percent stake, according to Reuters. “If agreed, the 30 percent stake will be sold [to Burgan Bank] at the same overall valuation,” he said.

Tekfen Holding said it had signed an agreement with Eurobank that Tekfen Holding is eligible to sell its nearly 30 percent stake to either Eurobank or to a third party, in a filing to the Istanbul bourse yesterday morning.

Burgan Bank runs trade activities for Kuwait’s largest investment company, Kuwait Investment Projects Company (KIPCO). KIPCO also has a stake in United Gulf Bank and other financial firms in the Middle East and North Africa. The Kuwaiti emir and his family own 44.63 percent of KIPCO, according to Reuters.

Turkey,