Turkeys factoring sector attracts foreign investors
Posted by meb at March 9th, 2008
Foreign investors who have so far focused mostly on Turkey’s banking and insurance sectors are now looking to factoring companies.
While British Bancroft Group acquired Eko Factoring last year, other private equity funds are also in the process of negotiation for factoring company acquisitions.
Creditwest Factoring, which transferred from the Savings Deposit Insurance Fund (TMSF) to Altınbaş Holding in 2003, is among the factoring companies foreigners are keeping a close eye on.
Many foreign investors have revealed their interest in Creditwest in the last two years, said Sefer Altıoğlu, Creditwest Factoring managing director.
Creditwest is open to a partnership with a company that has a serious financial background and culture. The only condition Creditwest has is to keep 51 percent stake of the company, said Altıoğlu.
Creditwest is not completely opposed to selling the company’s majority stake, “however, we would demand double the stock price from the company that is looking for anything more than strategic partnership. As Altınbaş Group, we are not experiencing financial problems,” said Altıoğlu.
Private equity funds not preferred:
Creditwest, however, is not looking to enter a partnership with a private equity fund, he said. “Private equities, when purchasing a company, are more interested in the profit they may attain by selling the firm after a certain period of time,” he added. “We on the other hand are more interested becoming partners with a company that has factoring experience at global level, which could help the company to gain the know-how attribution. The company we partner with should have the qualities to help us grow and establish a bridge for us to expand to other geographies.” A partnership just like Akbank-Citi is suitable for Creditwest, Altıoğlu said.
In terms of shareholding structure, 85 percent of Creditwest belongs to Altınbaş Holding while 15 percent is open to public. Investors demand to open 30 percent of the company to the public, said Altıoğlu, adding that this demand may be assessed if a positive environment occurs at the markets in the future.
Creditwest has been attracting investors with its stable growth and increasing profitability in the recent years. Total assets of the company, which stood at YTL 18.3 million in 2003, rose to YTL 154.5 million during the first nine months of 2007. The market value of Creditwest increased 8.5 fold from $10 million to $83.5 million within the last four years. The company’s return on equity rose from 10 percent to 60 percent during 2004-2007.
Creditwest, which had YTL 655 million turnover in 2007, targets at a turnover of YTL 1 billion this year, said Altıoğlu. The company also aims to reach an asset size of $1 billion within five years, he added. Creditwest Factoring also pushed the button for private sector bond supply. The company will export bonds worth YTL 50 million in nominal.
Factoring was seen for the first time in Mesopotamia around 4000 B.C. in the shape of “assignment of debt,” and it was the establishment of the first factoring company in Turkey in 1990 that revitalized the Turkish financial sector.
Subsequent to the takeover of the group bank holding the main shares of Toprak Factoring Inc., which was established in 1994, it was bought up by Altınbaş Holding and started its services for the financial sector under the new name Creditwest Factoring Inc.
Source: Turkish Daily News
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