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ANKARA: Turk petrochemical manufacturer Petkim meets its new owners

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  • ANKARA: Turk petrochemical manufacturer Petkim meets its new owners

    Today's Zaman, Turkey
    May 31 2008


    Turkish petrochemical manufacturer Petkim meets its new owners


    After several ill-fated attempts at its privatization, Turkey has
    finally managed to complete the sale of giant petrochemicals
    manufacturer Petkim, transferring ownership to the SOCAR-Turcas-Injaz
    joint venture yesterday at a well-attended signing ceremony in Ankara.

    The Azeri group submitted the second highest bid in the tender on July
    5 for the block sale of a 51 percent state-owned stake in Petkim.
    Kazakhstan's TransCentralAsia Petrochemical Holding consortium offered
    a higher bid, $2.05 billion -- later rejected by a commission
    overseeing the privatization of Petkim because one of the Kazakh
    group's partners had close relations with the Armenian diaspora. The
    Azeri group made a $1.02 billion down payment to the Treasury for the
    purchase of Petkim on Wednesday but later decided to increase the
    amount to $1.66 billion. The remaining payment will be made within
    three years. The group borrowed $625 million from Akbank and Garanti
    Bankası.

    Finance Minister Kemal Unakıtan, Privatization Administration
    (Ã-Ä°B) President Metin Kilci and the acting president of the
    Social Security Institution (SGK), Fatih Acar, were all present at the
    signing ceremony of the contract transferring ownership. The
    consortium was represented by State Oil Company of the Azerbaijan
    Republic (SOCAR) Chairman Rövnag Abdullayev and Turcas Chairman
    Erdal Aksoy.

    Petkim was established in 1965 under the leadership of the Turkish
    Petroleum Corporation (TPAO). It initially decided to establish the
    Yarımca petrochemical complex and started up ethylene, chlorine
    alkali, VCM, PVC and LDPE plants in 1970. To meet soaring demand, it
    opened its new facilities in the AliaÄ?a district of
    Ä°zmir.

    Today it has 14 manufacturing plants, eight other plants that it
    shares with the private sector, one electricity generation facility,
    one recycling unit and a port. It also owns and runs Güzelhisar
    Dam. The company is a major provider of more than 50 products for the
    construction, automotive, agriculture, electricity, electronic and
    packaging industries.

    Speaking at the ceremony, Unakıtan said the Petkim sale will be
    a fresh start for the Turkish petrochemicals business and that the
    company will soon become a major player in the world petrochemicals
    market. Privatizations are not conducted to earn money, he said,
    adding that each sale is indeed a structural reform.

    Almost all countries, the Iron Curtain countries of the past included,
    have completed the sale of their inefficiently run state-owned
    properties, but Turkey has dragged its feet for years for ideological
    reasons. "Privatization is done for the sake of competitiveness and to
    give the economy more dynamism," he noted.

    He also expressed pleasure over a company from "Turkey's brother
    nation, Azerbaijan," having purchased Petkim.

    Aksoy noted in his speech that they aim to increase Petkim's
    production capacity. They will not lay workers off, he added.

    Meanwhile, according to the contract signed by the parties, the
    Treasury will hold the golden share, giving it expanded rights in
    management despite its minority share in the new ownership structure
    of the company.
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