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Thursday, 5 October, 2000, 18:44 GMT 19:44 UK
Turkey outlines telecoms sell-off
The Istanbul Stock Exchange
Small investors will also be able to buy Turk Telecom shares
Turkey on Thursday said it would sell 34% of state-run telecommunications firm Turk Telecom as part of a $7.6bn privatisation programme this year.

A statement from the prime minister's office said a 29% stake in the telecoms operator would be offered to a strategic investor while the remaining 5% would be sold in a public offering.

The planned sale is a key element of economic reforms agreed with the International Monetary Fund under a three-year, $4bn loan agreement.

In September, an IMF delegation visiting the country had urged quick action on selling Turk Telecom, which Turkish officials valued at about $10bn on the basis of research carried out in 1998 by US investment bank Goldman Sachs.

Management rights concern

But earlier privatisation plans came to nothing when a tender inviting offers by 15 September for a 20% stake attracted no bidders.

Industry sources cited concerns over management rights as the main reason for that tender's failure, sending Turkish privatisation officials back to the drawing-board.

Having agreed to sell more of Turk Telecom, the prime minister's office on Thursday reassured prospective buyers that the investor's say in the company's management would be proportional to the size of the stake held although unanimity would be sought on strategic decisions.

The detailed terms of the tender would be drawn up as soon as possible by a technical committee, it added.

Fourth GSM licence

Turk Telecom has a monopoly in the domestic fixed-line market and is due to be sold a GSM (global standard for mobiles) phone licence - to be Turkey's fourth - before privatisation in an attempt to improve its attractiveness to buyers.

Turkey has two existing GSM licence holders - Turkcell and Telsim.

A third licence is due to be finalised with a consortium of Telecom Italia and Turkish bank Is Bankasi, whose $2.525bn licence acquisition was approved by Turkey's top administrative court on Monday.

Revenue from telecoms sales is an important part of Turkey's overall privatisation programme, which the state hoped would generate $7.6bn in 2000.

Other elements include financial sector reform and the rehabilitation and sale of eight banks under state control.

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04 Oct 00 | Europe
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