Turkish state fund approves sale of armored vehicle maker BMC

ISTANBUL - Reuters

DHA Photo

Turkish state fund on May 8 approved the 751 million lira ($360 million) sale of armored vehicle maker BMC, seized from troubled conglomerate Çukurova Holding a year ago, to a businessman close to the government.

The Savings Deposit Insurance Fund (TMSF) said it would approve the sale of BMC to Es Mali Yatırım & Danışmanlık, a company owned by Ethem Sancak, who also owns the pro-government Aksam newspaper.

The TMSF had initially estimated BMC’s value at 958 million lira but postponed an auction for the company last month as it held out for the best possible bid.

Sancak was the only bidder at a new auction held last week.

The TMSF seized BMC, along with 11 other group companies, from Çukurova last May, alleging that the conglomerate failed to make payment on $455 million worth of debts owing to the fund.

The İzmir-based vehicle manufacturer was supposed to deliver 468 armored vehicles (Kirpis) and trucks in a range of sizes to the Turkish Defense Ministry by the end of 2012. However, the company succeeded in only delivering 295 of the order, until 25 more Kirpis and trucks were delivered at the end of March.

Sancak, who used to mostly operate the in pharmaceutical and health sectors, has recently switched the focus of his business.

The businessman, who acquired Çukurova’s former media assets including broadcaster Skyturk 360 and daily Akşam in November 2013, announced his ambition of “building up a strong presence in the media and defense sectors” during BMC negotiations on April 30.

His name emerged as part of a wave of audio recordings incriminating Prime Minister Recep Tayyip Erdoğan, his family and close businessmen. The leaked conversations allegedly featuring him talking with other prominent businessman and media figures imply that he acquired former Çukurova assets upon government directives.

Çukurova is also in dispute with shareholders in Turkcell , Turkey’s biggest mobile phone operator, over its 13.8 percent share in the firm, a controlling stake due to its complex ownership structure.

Russia’s Altimo, an arm of tycoon Mikhail Fridman’s Alfa Group, appropriated the stake when Çukurova defaulted on a $1.35 billion loan.

Çukurova has been ordered to pay around $1.6 billion to Altimo to recover the stake, although the deadline for the payment has repeatedly been postponed.

A U.S. appeals court last month threw out a ruling that froze the assets of Çukurova, clearing the way for it to try to buy back the Turkcell stake.