Astaldi restarts talks to sell Bosporus bridge to Chinese investors - report
Italy’s Astaldi restarted negotiations with Chinese investors to sell a bridge spanning the Bosporus in Istanbul after the Turkish government agreed to change the way tolls are calculated, Bloomberg reported.
Astaldi and İç Yatırım Holding of Turkey are again in discussions with China Merchants Group, Bloomberg reported citing people familiar with the matter. The government will now adjust the exchange rate used to charge tolls for the bridge twice a year instead of once a year, it said.
Foreign firms including Astaldi have sought to sell assets in Turkey and elsewhere to cut costs. Turkey is in the middle of an economic downturn caused by a currency crisis. Its government has sought to curb price increases on items such as toll roads, electricity, food, fuel and water in order to slow inflation and stimulate economic growth.
Although talks are continuing, there is no firm agreement between the sides, Bloomberg said. The bridge – the third to span the Bosporus and part of a key highway to Istanbul’s new mega airport -- opened in 2016 after an investment of $3 billion. The partners were seeking an equity value of as much as $1.4 billion when investors previously showed interest, the news service reported. They had been conducting due diligence on the asset last year ahead of a possible sale.
Western capital flows to Turkey have slowed in recent years, meaning that money from countries in Asia and elsewhere has formed a larger share of foreign direct investment. Turkey needs FDI and loans from abroad to help fund economic growth and bolster its finances.
Astaldi owns 33 percent of the bridge and has been seeking to sell the asset for more than a year. The partners borrowed $2.3 billion from Turkish banks for the project, which included loans with Treasury guarantees. A portion of the loans was sold by Garanti Bank and state-run Halkbank to Bank of America and Merrill Lynch earlier this year.
Traffic across the suspension bridge, which at two kilometres long is one of the world’s largest, has failed to meet projections, requiring the Turkish government to meet shortfalls from taxpayer money, local media including Hürriyet newspaper have reported.