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    Record oversubscription comes for Turk Telekom

    Hurriyet English
    02.05.2008 - 12:46 | Son Güncelleme:

    A total value of $4 billion bids were collected from domestic investors during the initial public offering (IPF) for the 15 percent stake of Turk Telekom, reported ANKA on Thursday. The IPF bid amount collected is equal to six times the amount reserved for domestic investors. The total bid amount is also equal to double the entire stake that will be sold.

    Oversubscription has been encountered during the initial public offering of Turk Telekom, the nation's fixed-line operator, which took place on April 28-30.

    The reason for this oversubscription is the price range determined at a close price in Turk Telekom's first privatization process in 2005, the economic daily, Referans said in an article on Friday.  

    "Turk Telekom encountered oversubscription despite the fluctuations in the markets and a global credit crunch, thanks to the price range determined in the close range during the company's first block privatization process three years ago," said newspaper.

    The Privatization Administration set a price range of 3.90 to 4.70 new Turkish liras (YTL) ($3.04-3.67) for an initial public offering of Turk Telekom, valuing the operator as high as 16.45 billion YTL ($12.9 billion). In first privatization process in 2005, Dubai-based Oger Telecom paid $6.55 billion for a 55 percent stake in the company that was valued at $11.91 billion at that time.

    Economists observing the privatization process have criticized the Privatization Administration for the timing of the offer considering the current global economic woes and say the price range is too low.
    The final bid collection will be conducted on May 7-9 following to the approval of the Capital Markets Board of Turkey (SPK). The public offered shares are planned to be traded on the Istanbul Stock Exchange (IMKB) on May 15 following the approval of the IMKB's board.

    Turk Telekom, whose mobile business, Avea, is the third operator in the Turkish market, gained revenues of 9.2 billion YTL ($7.18 billion) last year and a net profit of 2.5 billion YTL ($1.95 billion.), according to a circular released by the Privatization Administration.

    The company had 18.2 million fixed-line subscribers at the end of 2007, while its broadband Internet subscribers stood at 4.2 million.


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