European Development Bank to take 10 pct stake in Borsa Istanbul
Negotiations are underway in Istanbul for a pre-IPO investment by EBRD in Turkish stock exchange
ANKARA
The European Bank for Reconstruction and Development (EBRD) is entering exclusive negotiations to acquire a 10 percent stake in Borsa Istanbul, the EBRD said in a statement on Friday.
The development bank called the agreement, "a landmark deal which will support Turkey’s efforts to reshape its capital markets."
Borsa Istanbul is currently majority-owned by the Turkish government. It is the only stock exchange in Turkey.
The EBRD first vice president Phil Bennett and EBRD Director for Insurance and Financial Services Noel Edison signed a term sheet in Istanbul on Friday with Borsa Istanbul Chairman Talat Ulussever and Borsa Istanbul CEO Tuncay Dinc.
"We have a long-term approach to our investments and a far-reaching presence in the region – we invest in 35 countries. We look forward to contributing to the further development of Borsa Istanbul as it moves to its next phase of development."
The current situation in Turkey, where development of capital markets has lagged behind overall economic development, presents an opportunity for Turkey to diversify its financing, which is needed for the next stage of its economic growth.
Borsa Istanbul is expected to make an initial public offering (IPO) on its own equities exchange next year. The IPO is part of the government’s comprehensive plan to reshape Turkey’s capital markets and to turn Istanbul into a financial hub for the region spanning Central Asia, southeastern Europe and North Africa.
The EBRD started investing in Turkey in 2009 and currently operates from offices in Istanbul, the capital Ankara and Gaziantep, in the southeastern part of the region.
In just six years the Bank has invested over €5 billion ($5.5 billion) in Turkey through more than 140 projects in infrastructure, energy, agribusiness, industry and finance. It has also mobilized over €12 billion ($13.2 billion) for these ventures from other sources of financing.
In 2014, Turkey became the leading recipient country of the EBRD, with new investments worth €1.4 billion ($1.54 billion).
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