IOC-Calik poised to clinch deal for acquisition of Petkim

05-Jul-07

Indian Oil Corporation (IOC) is on the verge of concluding the process for acquiring a controlling stake in the Turkish government-owned petrochemical firm Petkim, valued at over US$1 bln. Joint bidders, IOC and Calik Energy of Turkey, have been shortlisted for picking up 51% equity stake in Petkim Petrokimya Holding, as one of the eight shortlisted bidders. Other shortlisted bidders in the race include Socar & Turcas Enerji AS-Injaz, Carmel-Limak, TransCentral Asia Petrochemical Holding, Zorlu Holding, Hokan Chemicals, Naksan-Torunlar-Toray-Kiler and Firat Plastik, Kaucuk Sanayi ve Ticaret. The IOC-Calik combine is favourably positioned to clinch the deal in view of its aggressive investment plans in the region. Senior board officials of IOC's business development wing are already stationed in Ankara, and are expected to be joined by the company Chairman for the final bidding round. Turkey is often referred to as the gateway to European markets and a grip in its refining and petrochemical sectors should add to IOC's global imprints in this region. Picking up a controlling stake in Petkim is a strategic fit for IOC, as it would enable the company to expand its downstream operations to Europe. IOC, which has tied up with Calik Enerji of Turkey for the bid, has already been given a licence to set up a US$6 bln greenfield refinery at Ceyhan in the Turkish province of Adana on the Mediterranean Sea. The greenfield investment is not connected to the privatisation. IOC is also picking up a 12.5% stake in Samsun-Ceyhan pipeline. The pipeline would supply oil from Turkey's Black Sea port of Samsun to Ceyhan on Mediterranean coast. A previous attempt to hive of Petkim in 2003 had failed. Five bids were received, out of which three had been shortlisted. Following an auction in June 2003, Standart Kimya Pet Dog San ve Tic AS had won the bid for the block sale of about 88% of Petkim shares. However, due to failure of Standart Kimya to meet its obligation in time, the deal was cancelled and its US$10 million deposit was forfeited. Another attempt was made to sell 88% of the company's share without any success after which 34.5% share of Petkim was sold through secondary public offering in 2005.