|Oger Telecom awaits Turkish Treasury decision on IPO
|Company has agreement for 55 percent stake in Turk Telecom
The giant Oger Telecom, part of Saudi Oger which was set up by Hariri's family, said that Turkey's Treasury will decide where and when an initial public offering (IPO) in state landline company Turk Telekom is made.
Late last month, Saudi Oger Telecom signed an agreement with Turkish privatisation authorities for a 55 percent stake in the fixed-line operator, a central element of the country's sell-off program. A venture led by Oger and including Telecom Italia made the highest bid of $6.55 billion for the stake in a tender at the start of July.
"The IPO for Turk Telekom is regulated by the shareholders' agreement, which is the decision of the Treasury. Our role is to assist such a decision by the Treasury, in terms of timing and location," Oger Telecom general manager Paul Doany said.He said that the compa-ny planned multi-billion doll-ar investments.
"We do envisage large investments in resources [human resource development and training], in addition to facilities which will run in many billion dollars over the next five to seven years," he said.
The second-highest bid in the tender - $6.5 billion - was made by the Etisalat-Calik Joint Enterprise Group.
Oger Telecom has set up an Istanbul-based company called Ojer Telekomunikason A.S. with capital of $350 million which signed last month's deal with the Turkish transport and finance ministries.
The Competition Board approved the tender results in July and the deal is at the stage of being sent to the country's top administrative court, the Danistay, which must give its approval.
The Danistay will have a maximum 60 days in which to express its view on the sale. The agreement will then be signed.
On completion of the deal, Ojer Telekomunikasyon will pay the first instalment, composed of 20 percent cash ($1.3 billion), plus a bank guarantee for the next payment including outstanding interest, which will be around $1.4 billion, dependent on the Libor rate.
Turk Telekom lost its monopoly status last year but still controls the domestic landline market. It is the world's 13th-largest telecoms operator, with 19 million subscribers.
Doany defended the deal, stressing that Turkey is a very promising market.
Turk Telecom, which manages 19 million fixed and mobile lines, records a net profit of nearly $1 billion a year.
"We expect to achieve a considerable growth in the mobile business in Turkey but I don't expect the number of fixed lines to rise in the near future," Doany told The Daily Star earlier.
Doany said that with the 55 percent stake of Turk Telecom, Oger Telecom now manages more than 27 million fixed and mobile lines in four countries around the world. Oger Telecom does not intend to make any drastic cuts in the number of Turk Tele-com employees.
"There are 55,000 employees in Turk Telecom managing more than 19 million phone lines. This is relatively good percentage of employees for a sector with this size," he said.
Doany said that his company intends to train Turk Telecom staff in the latest technology, adding that they intend to introduce all the latest technologies into the Turkish market.
Apart from Turkey, Oger Telecom operates and manages mobile and fixed-line networks in South Africa, Romania and Portugal. The founder of Saudi Oger, the late Rafik Hariri, was no longer involved in the affairs of the company after he became prime minister of Lebanon in 1994.
The Daily Star