Prime Ministry Privatization Administration Privatization in Turkey Ahmet

Prime Ministry Privatization Administration Privatization in Turkey Ahmet Aksu June 11, 2010

Introduction § Approximately $ 40 billion has been accrued since 1985 § There are currently 13 companies in the privatization portfolio in addition to other entities in the program; whose privatization implementations are undertaken by the Privatization Administration § Major privatization implementations are ‘electricity distributions, generation, and natural gas distribution projects in 2010. § Turkish privatization program did not halt due to the global economic crisis. 1 www. oib. gov. tr

Almost 80% of all privatization revenues were accrued between 2004 -2009 $8. 2 billion $30. 4 billion % 21 % 79 2 www. oib. gov. tr

Major Companies and Entities in the Privatisation Portfolio Companies under the Administration Program Companies to be privatized under special legislation Banking Sugar industries Electricity distribution 75 100 National lottery games 1 Retail Turkish Airlines Maritime transportation Toll motorways 2 100 49 100 Telecoms 3 Tobacco and salt production Copper mines Floor tiles & cement pipes 100 56 Petrochemical Sugar industries Natural gas distribution 10 10 1 License will be granted to operate the national lottery games 2 PA currently leading the privatization without owning the shares 3 Privatization studies undertaken under law 406 SOURCE: Privatization Administration 32 Electricity generation 2 80 3 www. oib. gov. tr TCDD Ports 2 xx Percent of share belonging to Privatization Administration leads privatization of key enterprises in Turkey

Major Closed Privatization Implementations, 2010 COMPANY METHOD REVENUE § BANDIRMA PORT TOR 175. 500. 000 $ § SAMSUN PORT TOR 125. 200. 000 $ § TTA İZMİR KONAK IMMOVABLE ASSET SALE 4. 994. 000 $ § TTA AYVALIK SALT PLANT BLOCK SALE 6. 000 $ § TTA ÇAMALTI SALT PLANT BLOCK SALE 76. 660. 000 $ § TTA ANKARA IMMOVABLE TOR 20. 000 $ § TTA İZMİR KARŞIYAKA IMMOVABLE TOR 24. 534. 000 $ BLOCK SALE (TOR) 485. 000 $ § OSMANGAZI DISCO www. oib. gov. tr

Ongoing Privatization Implementations - I NAME Sümer Holding A. Ş. IMMOVABLE /SHARE -Balıkesir Immovable 25. 03. 2010 BIDDING DEADLINE 25. 06. 2010 -Mersin/Kemalpaşa Immovable (TCDD) State Railway -Denizli/Koyunaliler Immovable 25. 06. 2010 -İstanbul/Başakşehir Immovable -Balıkesir/Akçay Immovable Treasury of Finance State Supply Office -Muğla/Bodrum Immovable -İstanbul/Maltepe Immovable -İzmir/Konak Immovable -İstanbul/Üsküdar Immovable 5 www. oib. gov. tr 25. 06. 2010

Ongoing Privatization Implementations - II NAME Boğaziçi El. Dis. Co IMMOVABLE /SHARE 25. 03. 2010 BIDDING DEADLINE % 100 Share 22. 07. 2010 Dicle El. Dis. Co % 100 Share 22. 07. 2010 Gediz El. Dis. Co % 100 Share 22. 07. 2010 Trakya El. Dis. Co % 100 Share 22. 07. 2010 Iskenderun Port TOR for 36 years 04. 08. 2010 %80 Share 19. 07. 2010 Başkent Natural Gas Distribution 6 www. oib. gov. tr

Due Recievables - I Tender Date Group C Portfolio Sugar Factories 08. 12. 2009 Bid Price Buyer Status 606. 000 AK-CAN Şeker Sanayii Negotiations are finalized. Stay order decision Tender process is finalized. Stay order decision. Aras El. Dis. Co 25. 09. 2008 128. 500. 000 Kiler Alışveriş Hizmetleri Çoruh El. Dis. Co 06. 11. 2009 227. 000 Aksa Negotiations are finalized. Çamlıbel El. Dis. Co 18. 02. 2010 258. 500. 000 KOLİN Negotiations are finalized Yeşilırmak El. Dis. Co 06. 11. 2009 441. 500. 000 Çalık Negotiations are finalized. Fırat El. Dis. Co 18. 02. 2010 230. 250. 000 Aksa Negotiations are finalized Uludağ El. Dis. Co 18. 02. 2010 940. 000 LİMAK Negotiations are finalized Vangölü El. Dis. Co 18. 02. 2010 100. 000 Aksa 7 www. oib. gov. tr Negotiations are finalized

Due Recievables - II Tender Date TTA Immovable Istanbul/ Paşabahçe TTA Immovable Izmir/ Alsancak Bid Price Highest Bidder Status PHC Decision in place. Additional time given for the SPA 15. 06. 2009 202. 067. 000 Hasan Sever JVG 18. 03. 2009 8. 704. 119 İzmir JVG 8 www. oib. gov. tr Negotiations are finalized. Stay order decision due to change in land registry

Due Recievables - III Derince Port Tender Date Bid Price Highest Bidder 12. 09. 2007 195. 250. 000 Türkerler JVG 9 www. oib. gov. tr Status Council of State opinion on the concession agreement has arrived

Due Recievables - IV (TCDD) State Railway Tender Date Bid Price Highest Bidder Status 24. 02. 2010 12. 280. 000 $ Konya Yıldızı Un Gıda İnşaat Alüminyum San. Ve Tic. Ltd. Şti. The agreement will be signed in June 2010. 08. 03. 2010 3. 300. 000 $ Şah Gayrimenkul Yatırım İnşaat Tic. Ltd. Şti. PHC Decision awaited. 02. 04. 2010 1. 267. 000 $ Abuzer Canan Dereci PHC Decision awaited. İzmir/Konak Immovable Treasury of Finance Karaağaç Immovable Sümer Holding A. Ş. Adıyaman Immovable 10 www. oib. gov. tr

Due Recievables - V Group Tander date Highest Bidder Bid Price ($) Status Group 1 İznik-Dereköy İnögöl-Cerrah M. K. Paşa. Suuçtu 04. 05. 2010 Kent Solar Elek. Ür. San. Tic. A. Ş. 6. 600. 000 Negotiations are finalized. Competition Board decision awaited Group 3 Kayaköy 05. 2010 Nema Kimya-Espe OGG 17. 411. 500 Negotiations are finalized Group 9 Kayadibi 06. 05. 2010 Group 14 Bayburt Çemişkezek Girlevik 07. 05. 2010 Group 15 Esendal Işıklar-Visera 10. 05. 2010 Competition Board decision awaited İvme Elektromekanik Ot. Sis. San. ve Tic. Ltd. Şti. 7. 644. 000 Boydak Enerji Üretim ve Tic. A. Ş. 29. 050. 000 Demistaş Doğu Elk. Mak. İnş. San. Ve Tic. A. Ş. 6. 550. 000 11 www. oib. gov. tr Negotiations are finalized Competition Board decision awaited

Due Recievables - VI Group Tander date Highest Bidder Bid Price($) Status Group 19 Arpaçay-Telek Kiti 11. 05. 2010 Kisan İnş. Müh. San. ve Tic. A. Ş. . 14. 700. 000 Negotiations are finalized Competition Board decision awaited Group 2 Taraklı-Hendek Pazarköy-Akyazı Bozüyük 12. 05. 2010 Sarar Giyim Tekstil San. Tic. A. Ş. 5. 775. 000 Negotiations are finalized Competition Board decision awaited Group 5 Turunçova-Finike 12. 05. 2010 Fides Reklam Enerji Hiz. Lojis. Tur. San. Tic. A. Ş. . 2. 760. 000 Negotiations are finalized Competition Board decision awaited Group 17 Adilcevaz Ahlat Malazgirt Varto-Sönmez 12. 05. 2010 Er-Bu İnşaat ve Tic. Koll. Şti. . Ercan Tunç-Burhan Çetin 6. 350. 000 Negotiations are finalized Competition Board decision awaited Group 4 12. 05. 2010 Aksu Enerji ve Ticaret A. Ş. . 56. 080. 000 Negotiations are finalized Competition Board decision awaited Kovada- I Kovada-II 12 www. oib. gov. tr

Due Recievables - VII Group Tander date Highest Bidder Bid Price($) Status Group 10 Bünyan Çamardı Pınarbaşı Sızır 13. 05. 2010 Kayseri ve Civarı Elekt. T. A. Ş. . 69. 700. 000 Negotiations are finalized Competition Board decision awaited Group 7 Bozkır Ermenek Göksu 14. 05. 2010 Fırat Enerji Üretim A. Ş. 86. 400. 000 Negotiations are finalized Competition Board decision awaited Group 6 Anamur Bozyazı Mut-Derinçay Silifke Zeyne 17. 05. 2010 Seba Ortak Girişim Grubu 13. 520. 000 Negotiations are finalized Competition Board decision awaited Group 16 Çağ-Çağ Otluca Uludere 18. 05. 2010 Nas Enerji A. Ş. 40. 800. 000 Negotiations are finalized Competition Board decision awaited 13 www. oib. gov. tr

Due Recievables - VIII Group Tander date Highest Bidder Bid Price($) Group 18 Engil Erciş Hoşap Koçköprü 20. 05. 2010 Nema Kimya-Espe O. G. G. 50. 000 Negotiations are finalized Group 13 Besni Derme Erkenek Kernek 21. 05. 2010 Kayseri ve Civarı Elektrik T. A. Ş. 13. 800. 000 Negotiations are finalized Group 8 Dere İvriz 24. 05. 2010 Seba Ortak Girişim Grubu 5. 700. 000 Negotiations are finalized Group 11 Değirmendere Karaçay Kuzuculu 03. 06. 2010 Group 12 Koyulhisar Ladik-Büyükkızoğlu 03. 06. 2010 TOTAL 3. 770. 800. 000 $ 14 www. oib. gov. tr Status

The tenders for the privatization of Turkey’s electricity distribution continue Number of Regions 4 Assets Already private Başkent Sakarya Meram Osmangazi Privatization method § § § Timing § § § 1 6 Waiting Approval Çoruh Yeşilırmak Van Gölü Fırat Çamlıbel Uludağ Stay order decision Aras 4 Tender proses Boğaziçi Dicle Gediz Trakya 15 Total TEDAS- The Holding Company for state owned regional distribution companies Block sale of 100% of shares of the regional companies which have operational rights of the electricity distribution network Regulated tariffs with targets for distribution loss and operational costs Future network investments to be earned back through tariffs 3 regions privatized by the Privatization Administration was handed over in 2009, 1 region was handed over in in 1 H 2010. 7 regions are waiting for hand-over 4 regions in tender process. Remaining regions to be tendered within 2010 15 www. oib. gov. tr

80% of the shares of the Baskent Natural Gas Distribution Company will be privatized by PA Number of Subscribers Capital Structure : 13% R CAG Greater Municipality of Ankara 20% 80% Assets § § § § Location Privatization Administration License for monopolistic distribution in Ankara till 2037 2 nd largest natural gas distribution company in Turkey 2. 1 billion m 3 of natural gas sales volume in 2009 1. 2 million subscribers as of 2009 High growth potential – ~ 100. 000 newcomers per year Fixed tariffs in US$ terms until 2017 The majority of collection through pre-paid system (85%) Privatization method § Block Sale of %80 shares Timing § The tender was annaounced in May and the bidding deadline is 19. 07. 2010. 16 www. oib. gov. tr

İskenderun Port will be privatized in 2010 § Important port on the Mediteranean Sea Assets § Important gateway to the Middle East § 140. 000 tonnes/year container capacity § General cargo, dry and bulk cargo Privatization method § Transfer of operational rights Timing § The tender was announced in May and the bidding deadline is 04. 08. 2010 § 36 years 17 www. oib. gov. tr

The state owned sugar conglomerate Turkseker is beeing privatized gradually Assets • The holding company has 57 % of market share in Turkey • Total sugar production capacity per year: ~2 million tonnes Privatization method § PA aims to privatize the Company’s 25 factories / plants in [6] regional packages Timing § Majority stake in two affiliated companies were already successfully sold off § Portfolio B (Malatya, Erzincan, Elazığ ve Elbistan plants) was in tender. Bidding deadline was 21. 01. 2010 but has been intercepted by court decision § The tender for portfolio C (Kastamonu, Kırşehir, Turhal, Yozgat, Çorum ve Çarşamba plants) has been intercepted by court decision 18 www. oib. gov. tr

The whole motorway network of Turkey incl. Bosphorus Bridges will be privatized in the near future Assets § Total lenght of tollroads subject to privatization is 2. 021 km • 2 Bosphorus Bridges Sales [2009]: $ 402 million Vehicle number (2009) : 315 million Privatization method § To be privatized by Transfer of Operational Rights Timing § An amendment in law is necessary § Tender may be commenced in 2010 (depending on financial circumtances) 19 www. oib. gov. tr

Almost 40 % of the current installed capacity in power generation sector will be privatized shortly Total capacity of EUAS 23, 976 MW 3, 677 148 Assets Number of plants Thermal Hydro Run-on river Total 18 27 56 101 Privatization method § 9 Portfolios were formed ranging from 2, 795 MW to 356 MW in size § 3 thermal-only portfolios, 2 mixed thermal and hydro portfolios, 4 hydro-only portfolios Timing § In 2008 PA has privatized as a pilot project 9 small power plants (ADUS) with a total capacity of 140 MW for 510 million USD to Zorlu Group. § 52 run-on river plant have already been tendered in 19 groups. 613 bids were recieved and the total size of the privatization is approximately 440 million $ § The rest of the assets will be privatized as portfolios starting 2 H 2010 20 www. oib. gov. tr

The most important cruise terminal of Turkey will be privatized by BOT / TOR model Assets Privatization method Timing § Largest cruise port of Turkey § Total project area is c. 100, 000 m 2 § To be privatized by Transfering of Operational Rights & Built - Operate Transfer model § The whole region should be developed by building a cruise terminal, a five stars hotel, shopping malls and free shops § Preparatory studies ongoing 21 www. oib. gov. tr

THANK YOU FOR YOUR ATTENTION REPUBLIC OF TURKEY PRIME MINISTRY PRIVATIZATION ADMINISTRATION www. oib. gov. tr