25 % of Halkbank to be privatized through IPO
Posted by meb at February 7th, 2007
The privatization process of Halkbank has been partly clarified after the Privatization Administration stated that 25 percent of the bank will be sold on the stock exchange.
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The privatization process of Halkbank, one of Turkey’s largest public banks, has been clarified after the Privatization Administration (ÖİB) stated that they decided to sell the bank’s shares in an Initial Public Offering (IPO) on the stock exchange.
The Authority informed reporters that according to the decision of Supreme Privatization Board (ÖYK) dated Feb. 5, some 25 percent of the bank’s shares will be sold via IPO, and this will be completed in the first half of 2007. The written statement by the ÖİB expressed that “Within this framework, the studies for the privatization of Halkbank will be kicked off in the shortest possible time.” About 99.9 percent of Halkbank’s shares now belong to ÖİB. Although there is a simmering opposition from political groups in Turkey against the privatization of Halkbank, the government has indicated they will stand firm behind their decision and will not retreat from the sale.
Privatization Administration (ÖİK) President Metin Kilci has said that Halkbank’s move to go public would be Turkey’s most important public offering.
“We believe this will be a successful public offering,” said Kilci, emphasizing opportunities in Turkey’s investment funds. “Our stock exchange needs large public offerings.” He said the public offering of Halkbank, rather than a block sale, was a new decision, not a radical change. The block sale decision, he said, was based on the conditions last August and that the public offering decision was based on the most recent circumstances. Kilci said the public offering was not an election strategy but a privatization strategy that is set differently for each institution.
He said they were planning to finish the privatization of the bank by May. If the privatization is not completed by May 22, the bank has to announce its first quarter numbers, causing a month-long delay.
“Twenty-five percent is the top limit. We won’t go over that share, the privatization board urges that,” said Kilci in response to a question about whether they would use the call option. He said that 2006 was a big year for public offerings and that the prospects for 2007 were equally good.
Kilci said the Capital Markets Boards (SPK) would decide the amount of shares to be sold to foreigners and that they would advise only the SPK. ÖİK’s decision to have Halkbank go public has received its share of criticism.
“So if you can sell 25 percent of the bank through the exchange, and you think you can be successful, why do you not sell the remaining shares, then?” asked Sinan Aygün, chairman of the Ankara Chamber of Commerce, in a written statement. He emphasized that he would use any means necessary to make the entire bank open to the public.
The IPO will diminish the value of the bank, and any public offering made before the election will not be possible because of time constraints, said Ali İhsan Gelberi, coordinator of the Garanti Bank Economic Research Directorate.
source: Today’s Zaman
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