Billionaire Seizes Brief Lira Rally to Sell Turkcell Stake
Billionaire Seizes Brief Lira Rally to Profit From Turkcell Sale
(Bloomberg) -- Russian billionaire Mikhail Fridman grabbed the opportunity of a short-lived rebound in the lira and a rally in global markets to benefit from the sale of a stake in Turkey’s largest mobile-phone operator.
The disposal of 5% in Turkcell Iletisim Hizmetleri AS for about $205 million was done Monday through an accelerated share-sale process where demand outstripped supply. Credit Suisse Group AG and Goldman Sachs Group Inc. acted as joint global coordinators and book-runners for the deal.
Stocks and currencies soared Monday amid news of a promising coronavirus vaccine and optimism that U.S. President-elect Joe Biden’s administration will support global trade and economic growth. The lira rallied by the most on a closing basis in two years after Turkey’s finance minister quit a day after the central bank governor was fired, signaling a potential return to orthodox monetary and fiscal policies.
“This was a well-timed transaction,” Nick Koemtzopoulos, head of equity capital markets for Europe, Middle East and Africa at Credit Suisse in London, said in an email. The deal is the largest non-banking related share sale in Turkey since the initial public offering of Sok Marketler Ticaret AS in mid-2018, he said.
The transaction will support Turkey’s capital markets by bringing foreign funds into stocks, while also underpinning demand for the local currency, said Emre Kemal Mimaroglu, head of investment banking at Credit Suisse’s Turkey unit.
Primary and secondary listings have all but dried up in Turkey amid higher interest rates, currency instability and an economic downturn, which forced local companies to try and restructure debt.
“We are in active dialog with other Turkish corporates who could consider similar transactions with the objective of increasing the international free float of their respective listed shares,” Mimaroglu said.
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Turkcell dropped as much as 6.7%, the most since March 27, and was trading 5.8% lower by 15.42 liras at 4:31 p.m. in Istanbul.
The sale by Fridman’s Imtis creates the likely scenario of “overhang” in Turkcell’s shares, given that more stock could be sold, Ivan Kim, an equity at Xtellus Capital Partners Inc., who has a hold recommendation on Turkcell with a 12-month target price of 16.50 liras.
“The remaining stake is for sale as well,” he said. But it is subject to a 12-month lock-up from the “completion of the deal to overhaul the ownership structure.”
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