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Tue 17 Apr 2001 04:00 AM

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Turk Telekom: the sell-off saga continues

The privatisation of Turk Telekom is once again back on the agenda, but in a new twist the government has announced that no foreign company will be allowed to buy a controlling share.

The on-off sale of Turk Telekom could soon be back underway again, but this time the Turkish government has said that it will limit foreign companies to a minority share of the company.

The sell-off came back onto the agenda over the weekend after the government made the privatisation a key part of its financial crisis strategy.

The country’s economy is currently in serious trouble (its currency has lost 40% of its value in just two months), and the International Monetary Fund has out the sale of Turk Telekom at the heart of a proposed rescue package.

Last month the Ankara appeared to announce that 51% of the PTT would be made available, after initial offers of 20% and 33.5% failed to attract international bidders.

The 51% offer would have required a change in Turkish privatisation law, which currently limits sell-offs of public services to 39%.

Economy minister Kemal Dervis had vowed to make the necessary alterations to the law to allow a 51% block sale followed by a share offer, leading to most observers agreeing that such a sale would take place.

However, all that changed with the latest statement from Ankara. It re-iterates the government’s commitment to the sale, but stresses that no foreign company will be allowed a share greater than 50%.

When (or if) the sell-off takes place, the government intends to use it as the first step in ending the state fixed-line monopoly, allowing for an open market similar to its mobile one.

When valued three years ago, Turk Telekom was estimated to be worth around US$10 billion, a figure which would make the sell-off the largest in Turkey’s history

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