Privatization of Turkey’s Tobacco and Liquor Administration cancelled
The privatization of Turkey’s Tobacco and Liquor Administration (TEKEL) was abandoned this week after international bidders made offers that fell below expectations, said the nation’s Privatization Administration (OIB).
Japan Tobacco made the highest bid at $1.1 billion, amounting to approximately one third of the price the government was willing to accept. Turkey is hoping to raise four billion dollars in asset sales over the next year.
Turkey's parliament passed a law in June 2001 for the privatization of Tekel, deregulating prices in the sector and lifting restraints on the establishment of private plants. It also introduced measures to limit tobacco production and to phase out support purchases of tobacco by 2002.
Investment bankers said the low bids were a result of Turkey's political and economic instability and an unfriendly investment environment, reported Financial Times.]
Tekel, which trades in alcohol, tobacco and salt, earned revenues of $2.8 billion last year, of which 77 percent was generated by the cigarette division. — (menareport.com)
© 2003 Mena Report (www.menareport.com)