Foreign direct investors reduce stakes in Turkey

ISTANBUL-Hürriyet Daily News

Lakshmi N. Mittal, the chief executive of Mittal Steel. AFP photo

Arcelor-Mittal, one of the largest steel procuders in the world, has joined a number of foreign direct investor firms planning to reduce their holdings in Turkey, including Citibank, Dexia and Eurobank.

Arcelor-Mittal has decided to reduce its stake in Turkish steel producer Erdemir from the current 25 percent to 15 percent, according to Reuters.

The reduction is part of the company’s overall strategy to exit non-core area businesses and to reduce its debt. Arcelor-Mittal plans to sell approximately 134.3 million shares and warrants.

By selling its shares, it will reduce its total shares to 18.7 percent; with the warrant sales, its stake will be reduced to 12.5 percent.

Citigroup, one of the largest Aerican banks, has also revealed that it will sell out at least half of its stake in Akbank. Citibank has two investments in Turkey: Citibank Turkey and a 20 percent stake in Akbank.

“Turkey is a key market for us. We will reduce the stake below 10 percent. But we are not thinking of leaving the Turkish market,” Citi spokeswoman Shannon Bell said, according to daily Hürriyet.

Franco-Belgian bank Dexia, which has been deeply exposed to the European financial crisis, has been trying to sell its Turkish subsidiary, Denizbank, to prop up its financial structure.

Belgian and French governments bailed out Dexia in 2008, with 6 billion euros of support.

The second largest bank of Greece, Eurobank, has recently agreed to sell its 70 percent stake in Eurobank Tekfen to Burgan Bank, a Kuwaiti banking group.

Meanwhile, touching on the foreign investor’s sales of stakes in Turkish banks, Hüseyin Aydın, the president of the Union of Banks of Turkey, said yesterday at the İzmir Chamber of Agriculture that Turkish banking industry still maintains its appeal. “There will be investors coming in and going out of the Turkish banking industry,” the agency quoted him as saying.