Fitch affirms Dogus Holding's stable outlook

Published December 22nd, 2002 - 02:00 GMT

Fitch Ratings has affirmed the B senior unsecured foreign currency rating and B senior unsecured local currency rating of Turkey’s Dogus Holding (Dogus). The long-term outlook is stable.  


The ratings assigned to Dogus are mainly driven by the company's strong presence in the Turkish banking and financial sector; its dependency on the operating performance of its financial businesses; the ratings of Turkiye Garanti Bankasi and business diversification from its automotive, construction and food retail activities.  


The financial activities form the lion's share of the group's cash generation as they account for some 71 percent of turnover, have historically provided almost all of the group's operating profit and carry 69 percent of group's gross debt as of the first half of 2002. 


The group has made efforts to diversify its cash generation base and is aiming to strengthen its franchise in non-financial businesses mainly in food retail and construction. Garanti was the largest privately owned commercial bank in asset size according to IAS comparatives at end 2001. As the economy improves, Garanti should be one of the leading players in the Turkish banking industry. Fitch believes 2002 will be a transition year and that 2003 will be better reflective of Garanti's financial capabilities.  


Historically, Dogus has not incurred debt and the group companies have been borrowers. However, this changed both during and after the financial crisis in 2001 as the holding company required funds to participate in rights issues and to complete mergers.  


In the event of new partnerships which may provide capital injections or in a suitable environment for the IPOs of Dogus Automotive Holding or Dogus Holding, the capital structure may strengthen if the proceeds are used for debt repayment. In the future, the rating of the holding company may be differentiated from the rating of the bank and will be more dependent on cash dividend upflow, the attained diversification and the cash generation provided from non-financial operating businesses.  


Founded in 1975 and wholly-owned by the Sahenk family, Dogus Holding is a member of the Dogus Group. The group is a diversified Turkish conglomerate that has interests in a variety of financial services including banking, leasing, factoring, insurance, automotive, food retail, construction, tourism and media. — ( 




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