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Banking

Turkey reaps the benefits of privatization

Stalled state sell-off is finally yielding impressive results.

Turkish privatization revenues have reached a record $16.2 billion so far in 2005, according to finance minister Kemal Unakitan, with billions more dollars in revenues still to come. The figure is all the more impressive given that Turkey had collected just $8 billion from privatization in the 20 years preceding 2002, when the Justice and Development Party (AKP) took power.

In September Koc Holding won the race to buy oil refinery Tupras, paying $4.14 billion for a 51% stake in the refiner. This gives the company a market cap of around $5.3 billion. Oil company Royal Dutch Shell was part of Koc Holding's winning consortium.

The success of the Tupras tender is an indication of renewed investor interest in Turkish assets, and the strength of the government's commitment to privatization. It had originally tried to privatize Tupras in January 2004, but the process was annulled by Turkey's council of state.

Also in September, the deadline passed for bids to be received for the privatization of steel maker Erdemir.

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