Turkey aims to complete the block sale of 51 percent of Turkish Airlines (THY) in April 2001, the government said on Wednesday about 10 years after the company was included in the country's privatization program.
But steps have been taken to ensure that the airline remains under the control of Turkish interests and that the state has a veto, and to require new owners to bear until 2003 the cost of military transport in times of crisis.
The government has been obliged by the IMF to announce a concrete plan as part of conditions for an IMF rescue package for the Turkish financial system. "We will collect bids until February 28, after which we will launch negotiations to collect information as required by the tender terms," Turkish State Minister Yuksel Yalova told a press conference here. "I believe we will finalize the sale in April," added Yalova, who holds the privatization portfolio.
Turkey is poised to announce on Thursday the terms of the tender for the THY sale, along with a tender for the privatization of the Turkish Telekom, both which are pledges made to the International Monetary Fund in return for a $10-billion aid package.
Ankara, which already has a three-year, four-billion dollar stand-by deal with the IMF, turned to the Fund yet again when it suffered a grave cash shortage that battered the money markets and threatened devaluation.
Yalova said on Wednesday that in order to protect the THY's national identity after the sale, arrangements have been made to ensure that the company remains under the control of Turkish interests and to ensure that the state has the final word on issues regarding THY operations.
"We have restricted the maximum amount of shares a foreign partner can own to 24 percent of the THY's overall capital," the minister said. "In this framework, it has been decided that foreign companies can take part in the tender only if they establish a joint venture with Turkish partners, in which they hold the minority share," he added.
Yalova said that the tender terms would also require the prospective buyer to continue until the end of 2003 an obligation on THY to provide free services to the Turkish armed forces in times of crisis. "Thus, any potential negative impact on national security has been prevented by allowing enough time to push through the necessary legal provisions in this matter," he added.
The THY, which flies to 113 destinations with a fleet of 73 planes, was first included in Turkey's privatization proram in 1990, but the planned sale was delayed by political instability or indecision. — (AFP, Ankara
© Agence France Presse 2000
© 2000 Mena Report (www.menareport.com)
