Page 54 - TURKRptSept19

Italian group’s stake in Yapi Kredi Bank and UniCredit would be freed from the requirement that means it must receive approval from fellow stakeholder Koc Holding for considerations in relation to its stake.
UniCredit is reportedly interested in taking direct control of its 41% stake and subsequently exiting the venture.
It may also be thinking of arranging a secondary public offering (SPO), according to one of Bloomberg’s sources.
Both parties are reportedly targeting the concluding of the reorganisation process by the end of the year, but attaining that result was not certain, the news service also reported.
From the news report, it would appear that the sources were speaking from the UniCredit perspective.
Koc Financial Services, a 50:50 JV between Turkey’s Koc Holding and Italy’s UniCredit, controls an 81.9% stake in Yapi Kredi, with the remaining 18.1% publicly traded on the Borsa Istanbul.
Unicredit’s participation in Yapi Kredi has encountered turbulence since Turkey was hit by a currency crisis last summer, leading to a bitter recession.
UniCredit and Koc Holding initially bought a 57.4% stake in Yapi Kredi in 2005 for €1.16bn, but the market value of the Turkish lender has tumbled in recent years.
In January, Koc Holding and UniCredit each bought $200mn worth of Yapi Kredi’s subordinated bonds in order to support the Turkish lender’s capital.
In April last year, the Italian lender invested around €330mn in Yapi Kredi’s rights offer.
Yapi Kredi shares nosedive. Shares in Yapi Kredi Bank (YKBNK) tested TRY2.27 on August 29, pointing to a sharp decline from TRY2.53 seen the previous day during the morning trading hours prior to the Bloomberg report.
The bank’s shares were trading at Turkish lira (TRY) 2.31, up 33% y/y, as of 16:30 Istanbul time on August 29, suggesting a market cap of around TRY19.5bn.
Foreigners’ share in Yapi Kredi’s free-float fell to 50.27% on August 28 from 50.40% a day ago but still compared significantly higher than the 32.93% at end-2018, according to Is Invest’s daily foreigner share bulletin.
Shares in Koc Holding (KCHOL) were up 1.67% d/d and 15% y/y to TRY17.68.
Borsa Istanbul’s benchmark BIST-100 (XU100) index was also up 1.39% d/d to 97,219 while the USD/TRY rate stood at 5.84, up 0.48%.
Seker Invest said it believed a possible disposal of Unicredit’s shares in Yapi Kredi might weigh on share performance. The Istanbul-based brokerage made the observation on August 29 in its daily bulletin prior to the release of the statement by Koc Holding.
If the Bloomberg report is confirmed, a significant fall may be observed in the Yapi Kredi share price, Is Invest said in its daily bulletin, also prior to the statement by Koc.
Koc shares may also feel the pressure due to uncertainty, Is added, noting that UniCredit would initially head to Koc if it decided on a sale.
The suggestion that there could be a secondary public offering (SPO) by
54 TURKEY Country Report September 2019 www.intellinews.com