Turkey will miss its $7.6 billion privatization target by $1.7 billion this year if Turk Telekom is not sold, a top government official said.
The Privatization Administration (OIB) head, Ugur Bayar, told a news conference that privatization revenues of the Turkish Treasury would add up to $5.9 billion by the end of the year, with power sell-offs and GSM licenses.
Bayar said Turkey would put up a tender within two months to privatize the state airline Turkish Airlines (THY).
Bayar told reporters in Ankara that the OIB had carried out $2.9 billion worth in sell-offs since the beginning of the year and had collected $2.7 billion in cash proceeds.
"We are only $300-400 million behind our $3.1 billion target and will comfortably achieve it through ongoing fertilizer sell-offs and the planned THY sell-off unless a major snag emerges," he added.
Bayar said the government's full-year privatization target of $7.6 billion could be
missed because of a possible failure to sell Turk Telekom.
"The biggest concern for the International Monetary Fund (IMF) is that the sale of
Turk Telekom, the biggest portion of privatization revenues, is in danger," Bayar
said after a meeting with visiting IMF Turkey desk chief Carlo Cottarelli, who is
dubbed in the Turkish press as “Mr. Superintendent”.
Cottarelli said privatization of Turk Telekom was an important operation and that
he hoped it would be given momentum.
The Turk Telekom sell-off is a structural benchmark in Turkey's $4 billion, three-year stand-by deal with the IMF, but no bidder has emerged for a 20 percent stake with the management rights offered, Bayar said. The bidding deadline for the stake is Sept. 15.
Bayar also urged for caution in THY sell-off, which could be complicated as a result of the Telekom case, and suggested that management rights on offer should be arranged in a fashion to appeal to investors.
Bayar said a new tender could be opened by the end of the year to privatize the fixed-line monopoly after the sale strategy is reviewed, and that would satisfy the IMF as long as the economic program remains on track with its other aspects.
"The volume of the strategic sale could be raised to 34 percent, and a legislative amendment or transfer of management could be considered," Bayar said. The existing legislation limits the strategic sale to 34 percent. Bayar said an initial public offering (IPO) of Turk Telekom should be held but would be preferable once the company secures a strategic partnership.
The privatization chief also said certain sell-offs slated for the fourth quarter of the year, such as the secondary public offering of oil retailer Petrol Ofisi A.S. (POAS), would spill out into 2001. He added it would be wrong to tender iron & steel concern Erdemir before dealing with the "Isdemir problem."
The Isdemir sell-off tender was recently cancelled in the absence of investor interest. Bayar said a secondary public offering of refiner Tupras would depend on market conditions after the end of October. He added that a block sale of petrochemical concern Petkim's Aliaga plant could be brought up before the end of the year. — (Albawaba-MEBG)
© 2000 Mena Report (www.menareport.com)
