Although the privatization process began in Turkey in the early
1980s, it has accelerated recently as a result of the IMF and World
Bank-sponsored economic reform program. Within the framework of
this program, a decree (the decree) was enacted in July to start
the privatization of Türkiye Vakiflar Bankasi (Vakif Bank). This
privatization is the first step in what is expected to be a radical
restructuring of the public banks in Turkey.
Prior to the issuance of the decree, Vakif Bank's shares were
divided into three groups: (i) the General Directorate of
Foundations (GDF) held 55% (class A shares); (ii) foundations
existing since the Ottoman Empire held 20% (class B shares); and
(iii) individuals and legal entities held 25% (class C shares).
During a subsequent share capital increase of the bank, the holders
of class B shares did not exercise their preemption rights, so that
19.72% of their class B shares were transferred to the GDF.
Consequently, the GDF now holds these additional class B shares,
equaling a total of 74.72% of all shares.
According to the decree, the GDF's class B shares will be sold
by public offering. However, no decision regarding the sale of
class A shares, the authority for which falls under the Council of
Ministers, will be made before completion of the sale of class B
shares. According to the press conference held by minister Yüksel
Yalova in June, the goal of offering the class B shares to the
public in the first stage of the privatization process is to
achieve the highest economic value possible for these shares, and
to establish the real value of the class C shares.
There is a 60-day grace period after the publication date of the
decree in the Official Gazette in which it may be cancelled by
initiation of a lawsuit in the Constitutional Court by the
president or certain political parties. However, minister Yalova
expects the public offering to take place in October, and
negotiations with intermediary institutions to manage the offering
are underway.