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PRIVATISATION PROCESS
Privatisation
endeavour of Türk Telekom has been a
milestone in Turkish privatisation history.
It is the objective of the Republic of
Turkey to foster a viable and competitive
telecommunications sector, to attract
world-class partners for Türk Telekom with a
view of increasing efficiency and service
quality as well as executing the
privatisation process on a timely basis
responding to market conditions. In search
of an interactive process, a market testing
study has been undertaken during September
and October 2003, in order to design the
most pertinent privatisation strategy for
Türk Telekom.
Consequently,
the market testing study is completed during
the months of September and October in 2003
and the Council of Ministers Decree
encompassing feedback received during the
aforementioned market testing study was
issued on November 13, 2003. Accordingly,
minimum 51% of Türk Telekom shares were to
be offered as a block sale of company
shares, while following the block sale the
remaining shares could be privatised under
various privatisation methods including the
public offering. Turkey has secured an
investment friendly environment for
privatisations with regulations matching
European standards. With the enactment of
Law 5189, the foreign ownership restriction
on the part of foreign investors has been
lifted, the scope of the golden share has
been restructured and the satellite business
has been taken out of Türk Telekom to
function as a separate public entity.
In this
framework, an Informatory Process was
launched prior to the official tender
announcement whereby, the Privatisation
Administration has informed the interested
parties about the forthcoming process and
delivered information about Türk Telekom. 11
national and international companies
registered to the Process and they were
provided with operational, legal and
technological data of Türk Telekom as well
as the upcoming privatisation process.
Participation to the Informatory Process was
not a pre-requisite for participating the
official block sale tender.
The Council of
Ministers Decree dated October 15, 2004
number 7931 resolved for the sale of 55% of
Türk Telekom by block sale method and the
tender announcement be made until December
31, 2004. The same Council of Ministers
Decree authorized the Türk Telekom Tender
Commission for the application of
pre-qualification criteria during the tender
process.
The formal
tender process for the block sale of 55% of
Türk Telekom commenced with the tender
announcements on November 25, 2004.
Accordingly to be able to submit bids,
bidders were required to satisfy the
pre-qualification criteria determined by the
Tender Committee. Applications for
pre-qualification were delivered to the
Privatisation Administration until January
11, 2005 where 13 national and international
bidders qualified. The due diligence and
data room process was conducted in February,
March, and April 2005. Four bids were
submitted on the bidding deadline for the
privatisation of 55% of Türk Telekom shares.
The Tender Committee first evaluated the
business plans and all four bidders who
received scores over 75 points from such
evaluation, were invited to the opening of
the financial bids on July 1, 2005. After
the joint bargaining process, Oger Telecoms
Joint Venture Group submitted the highest
bid, with 6.550.000.000 US Dollars and the
Etisalat Joint Venture Group submitted the
second highest bid with 6.500.000.000 US
Dollars for the block sale of 55% of Türk
Telekom shares. The result of the tender has
been approved by the Council of Ministers
and has been published in the Official
Gazette dated 02.08.2005 and has become
effective.
The Share Sale
Agreement, the Shareholders Agreement, the
Share Pledge Agreement and the Concession
Agreement were signed on November 14, 2005.
With the signing of these agreements, 55% of
Türk Telekom shares were transferred to Ojer
Telekomünikasyon A.Ş. (Consortium led by
Saudi Oger and Telecom Italia) and
consequently, Türk Telekom ceased to be a
public company.
The Concession
Agreement was signed on the same day between
Türk Telekom and the Telecommunications
Authority.
The block sale
of 55% of Türk Telekom was awarded by the
“Acquisitions Monthly”; an international
prestigious finance journal, as the
“Emerging Market Deal of the Year 2005”.
Consequently, this is the first time that a
Turkish merger and acquisition transaction
was awarded at the international scale.
Finally, the
Council of Ministers Decree dated November
13, 2003 number 2003/6403 stipulated that
the percentage and the timing of the public
offering would be determined following the
block sale. Following the completion of the
block sale, preliminary studies regarding
the privatisation of the some of the
remaining shares owned by the Treasury
commenced. Within this framework, the
Council of Ministers Decree dated December
10, 2007 number 12973 stipulated that; 15%
of Türk Telekom shares would be privatised
through public offering until December 31,
2008.
As per the
provisions of Law 406, which requires that
5% of Türk Telekom shares must be allocated
to the employees of Türk Telekom as well to
those of the General Directorate of Postal
and Telegram Services as well as small
retail investors, the Council of Ministers
Decree dated December 10, 2007 stipulates
that 3% of Türk Telekom shares will be
allocated to the aforementioned employees
and small retail investors.
40% of Türk
Telekom shares were offered to domestic
investors, while 60% of the shares were
allocated to foreign institutional
investors. 210.000.000 shares out of
525.000.000 shares were sold to domestic
investors, while 315.000.000 shares were
sold to foreign institutional investors. The
IPO of Türk Telekom held in year 2008
constituted not only the largest IPO ever in
the Republic of Turkey to that year, but
also the largest telecom IPO globally in the
last four years.
Türk Telekom has been trading
at the Istanbul Stock Exchange (ISE) under
the symbol TTKOM since May 15, 2008.
The IPO of
Türk Telekom was selected as the "Best
Privatization in Central and Eastern Europe
in 2008" by “EMEAFINANCE”
magazine.
Recently, it
was decided by the Council of Ministers
Decree, dated January 14, 2013 numbered
4230, that 6.68 % of Türk Telekom shares
would be privatised through public offering
until December 31, 2013.
Please note
that this document is prepared for
information purposes only. The Privatisation
Administration reserves all rights to modify
the content of this document. In the event
that any discrepancy arises from this
document, the opinion of the Privatisation
Administration shall prevail.
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