Turkey makes big profit from sale of EBRD’s stock market stake to Qatar

Turkey’s sovereign wealth fund made a large profit from buying a 10 percent stake in Borsa Istanbul from the European Bank for Reconstruction and Development (EBRD) last year and selling it to the Qatar Investment Authority on Monday, its CEO indicated on Tuesday.

The Turkey Wealth Fund bought the shares from the EBRD at a much lower price than it sold them for, Zafer Sönmez, the fund’s CEO, said in an interview with BloombergHT television.

The fund may offload more shares in Borsa Istanbul via a public offering within the next two years, Sönmez said.

The wealth fund, established in 2006, controls Turkey’s largest state-run enterprises, including three banks and Turkish Airlines. It also acquired a controlling stake in Türkcell, the country’s largest mobile phone operator earlier this year. The institution is chaired by President Recep Tayyip Erdoğan.

The EBRD, one of the biggest foreign lenders and investors in Turkey, sold the 10 percent stake in Borsa Istanbul in December last year. It had put the shares up for sale in October 2019 after then Treasury and Finance Minister Berat Albayrak appointed Mehmet Hakan Atilla, a former deputy chief of state-run Halkbank as head of the exchange. Atilla was jailed by a New York jury in January 2018 for his role in evading U.S. sanctions on Iran.

Sönmez said the wealth fund planned to sell bonds to investors in 2021 after failing in a previous attempt this year. It had dropped the plans because the costs were too high, he said. The fund will then sell such debt every 18 months to two years, he said.

The fund’s establishment and its acquisition and operation of state-owned assets away from parliamentary oversight has been criticised by opposition politicians in the country. Turkey’s government says the fund is needed to better manage the assets and to invest in strategic industries.