ECONOMY

Turkey promises plan to sell off telecom firm ‘in coming days’

LONDON (Reuters) – Turkish Finance Minister Kemal Unakitan said yesterday he would announce a plan to privatize Turk Telekom «in the coming days.» Unakitan was speaking to reporters during a visit to London to explain Turkey’s economic case to investors and to key state-owned companies. «We will be making an announcement on the Turk Telecom privatization timetable soon…in the coming days,» he said. Officials in Turkey’s privatization administration were working on such plans. «Upon my return to Turkey, I will review their work and be in a position to announce a timetable for privatization,» he said. Unakitan’s team had been marketing stakes in the four companies Turkey has said it will definitely privatize, or further privatize, in 2003: Tekel, the alcohol and tobacco giant; Petkim, a petrochemicals firm; Tupras, a refiner and Turkey’s national lottery. The lottery may be floated via an initial public offering but Turkey wants to sell the first three companies to strategic investors, he said. Unakitan would not say that Turk Telekom would be privatized in 2003 but he insisted he would begin the process of doing so. «The work will start this year, however it may end some time in 2004,» he said. He said that one of the methods under consideration for Turk Telekom’s privatization was a convertible bond, a path that has been used before for privatizations in Greece and France. The privatization of Turk Telekom has been delayed several times, not only by the Justice and Development Party government, of which Unakitan is a key member, but also by Turkey’s previous government, a three-party coalition that left power in November 2002. Turkey’s April 19 letter of intent, detailing its latest promises to the International Monetary Fund (IMF), said the Turk Telekom plan would be published before the end of April, which was Wednesday this week. The IMF has pledged $16 billion to Turkey under the program in a bid to help the country escape its worst recession since World War II, triggered in 2001 when its previous IMF program collapsed. Bankers at Citigroup said that there was «huge interest» in the strategic stakes on sale, despite the depressed state of developed world equity markets. «The assets being sold are unique,» said Charles McVeigh III, chairman of the Citigroup’s European investment banking division, which is handling the sales. «If you are an international investor in Turkey, this is a one-off opportunity to buy a stake in the Turkish marketplace,» said McVeigh. «Weak equities are irrelevant.» In Ankara, Turkish Economy Minister Ali Babacan announced yesterday he expected the next IMF inspection of Turkey’s adherence to their loan deal to start on May 21. The inspection, set to last until May 30, will judge whether Turkey has done enough to earn the release of around $470 million from the loan pact in mid-June. Turkey has already slipped slightly from its promised program, having failed to approve a sell-off plan for landline monopoly Turk Telekom by the end of April. «That will not create a problem. Some measures are before Parliament. These things have a natural process,» Babacan told reporters in Parliament. Turkey recently revised the schedule of its loan payments from the IMF. It now has seven payments each of around $470 million outstanding before the pact ends. The final payment is expected to be in November, 2004.