Posted by meb at May 13th, 2008

The Turkish Treasury has earned $1.9 billion from the sale of a 15 percent share in Turkey’s telecommunications giant, Türk Telekom.

Assessing the results of the IPO at a press conference yesterday, Privatization Administration (ÖİB) President Metin Kilci said the high demand for the Türk Telekom shares at a time of turbulence in global markets should be seen as a vote of confidence in Turkey. Kilci said that in the book-building process domestic investors had demanded YTL 4.6 billion worth of Türk Telekom shares, whereas total demand by foreign investors exceeded YTL 6.3 billion. Therefore, Kilci said, 40 percent of the for-sale shares were set aside for domestic investors and the remaining 60 percent were reserved for foreign interests. In the subscription process, according to the figures Kilci provided, domestic investors wanted 4.7 times more shares than were initially offered them. Foreign investors, on the other hand, asked for 4.3 times more shares than they had been allocated.

All in all, the total size of the initial public offering (IPO) totaled $1.9 billion. When the IPO process first kicked off, the price of a single share had been determined as YTL 1, but in the book-building period it was estimated at between YTL 3.9 and YTL 4.7. But at the end of the subscription phase the final price was settled at YTL 4.6. At this price, the total value of the company becomes $15.5 billion and its market value reaches $12.7 billion. Trading of the shares will start by Thursday and the shares’ code will be TTKOM

Türk Telekom Chairman Paul Doany, too, made a few remarks about the process. He said everyone had made great efforts toward making Türk Telekom one of the largest companies in the world.

Garanti Securities CEO Metin Ar and Deutsche Bank Executive Director Ersin Akyüz also attended the press meeting.

In response to a question about whether the final price of the shares was satisfying, Kilci said it was not easy to comment on this issue since he was on the selling side of the table. The most accurate price evaluations will definitely come later from neutral experts, he added. “I believe stronger opinions will be expressed after the experts take the current demand and the future performance of the share in the stock market into consideration.”

Kilci noted that the Türk Telekom sale came at a time when investors have become more selective and careful about every step they take due to the instabilities and ambiguities affecting the entire world. The successful sale of the majority of Türk Telekom’s shares to Oger Telecom in 2005 also whetted investors’ appetites, he said, adding that the Türk Telekom IPO was the fifth-largest public offering in the world in 2008. “The Türk Telekom IPO will be recorded in history as Turkey’s biggest IPO in terms of correct timing, successful marketing campaigns, pricing strategy and revenue earned,” he said.
source: Today’s Zaman