Turkey opts for 2nd highest bid for Petkim

November 10, 2007
The Post, Pakistan
Agence France Presse

Smart move for Turkey's business!

ANKARA: Turkey's Competition Board has approved the sale of state-run petrochemicals company Petkim to the second highest bidder in a July tender, the Anatolia news agency reported Friday.

A consortium of the Azerbaijani oil company Socar, Turkey's Turcas and Saudi-based Injaz Projects had made the second highest bid of 2.04 billion dollars (1.39 billion euros) for a 51-percent stake in the company.

The board did not give a reason as to why the tender was not awarded to the highest bidder, a consortium of the Kazakh Caspi Neft and Eurasia companies, the Russian bank Troika Dialogue and a number of Kazakh investors, which offered 2.05 billion dollars.

Turkish newspapers reported after the tender that 65 percent of Troika Dialogue's shares belonged to a major Russian-Armenian investor described as a chief financer of the Armenian diaspora.

Armenians have for years been pushing for the recognition as genocide of the mass killings of their kinsmen during World War I under the Ottoman Empire, modern Turkey's predecessor. Ankara categorically rejects the genocide label.

The Competition Board's decision is subject to approval by the Privatisation Board for the takeover to be finalized.

Turkey held a first tender for 88.86 percent of Petkim in June 2003, which the controversial business family Uzan won with a bid of 605 million dollars.

But the deal was cancelled two months later when the financially-strapped Uzans failed to fulfill required conditions.

A second tender in August 2003 failed for lack of investor interest. In April 2005, 34.5 percent of the company's shares were sold to Turkish and foreign investors in a public offering worth 267 million dollars.

About 39 percent of Petkim shares are currently traded on the Istanbul stock exchange.

Petkim controls one-third of the petrochemical market in Turkey and employs about 4,000 people.

It posted a net profit of 41 million dollars in 2006.

Privatisation is a key element in Turkey's economic programme, backed by a 10-billion-dollar loan from the International Monetary Fund, as it recovers from two severe financial crises in 1999 and 2001.

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