ECONOMY

Tupras deal approaching

ANKARA (Reuters) – Turkey’s Competition Board said yesterday it had approved the sale of a 66 percent stake in state oil refiner Tupras, clearing the way for the final stage of the privatization process. Turkey’s High Privatization Board must still approve the $1.3 billion deal, which has been criticized by rating agencies and analysts who say it will add to the heavy debt load of the main buyer behind the winning bid, Russia’s Tatneft. The highest bid in the tender came from German-based Efremov Kautschuk GmbH, which represents the interests of Tatneft. Russia’s sixth largest oil firm said last week it was committed to its bid for Tupras, Turkey’s largest refiner. But rating agencies Fitch and Standard & Poor’s put Tatneft on Credit Watch last week, citing liquidity concerns. Competition Board Chairman Mustafa Parlak said the board would monitor any investments to increase Tupras’s capacity in case this hampered new market entrants if the buyers set up a distribution firm. Parlak announced the ruling at a news conference after a seven-hour meeting closely watched by financial markets. Tupras shares closed down 3.15 percent at 12,300 lira yesterday. The market closed before the announcement. A board official said last week it would not be possible for the company to establish an oil distribution firm. But legislation passed late last year liberalized Turkey’s petroleum sector and allowed for any Tupras owner to simultaneously operate a distribution company. Efremov Kautschuk has agreed to form a joint venture with Turkey’s Zorlu Group, which has industrial and financial interests, to run Tupras. Tupras, which controls nearly 90 percent of the Turkish market, has sought to cut its dependence on volatile Middle East supplies and buy more crude under long-term deals with Russia.