14 Ekim 2011 Cuma

TPG seeks way into local energy, media businesses

Wednesday, October 12, 2011GÖKHAN KURTARAN
ISTANBUL- Hürriyet Daily News
TPG Capital, former owner of Turkey’s Mey İçki, says it is ready to revisit the country with bigger investments in energy and media. A partner of the US-based firm tells the Daily News that TV channels are much more profitable than newspapers.

Bonderman, founding partner of TPG and the company’s local representative Cüneyd Zapsu, listens to a speech during the Investing Turkey conference in Istanbul. AA photo.

TPG Capital, a global private equity investment company, is planning for a vast amount of investment in Turkey that might exceed its former alcoholic drinks business of Mey İçki, according to a senior executive.

The new TPG investments will focus on energy and media, Ramzi Gadeon, a TPG partner, told the Hürriyet Daily News yesterday while speaking on the sidelines of the group’s “Investing Turkey” meeting in Istanbul.

“Rather than acquiring a Turkish newspaper, we are interested in buying a Turkish TV channel, as it would be much more profitable,” Gadeon said, declining to comment on the recent speculation that that the company might consider partnering with Turkey’s Ciner Group in the media business.

“TPG is ready to invest a minimum of $100 million and up to billions of dollars in Turkey’s media and energy sectors,” he said.

TPG had acquired Turkey’s Mey İçki, which also owns Turkey’s traditional and largely consumed Yeni Rakı alcohol band in 2006 for $800 million from the state. It sold the drinks maker for nearly $2.1 billion to Diageo in February.

Energy privatization
The Turkish government will focus more on privatization in the energy sector, according to Finance Minister Mehmet Şimşek. “We aim to conclude the privatization of electricity distribution companies,” Şimşek said at the TPG event.

The government plans sales in electricity generation facilities rapidly within the next few years, adding that the process of privatizing highways and bridges has also been initiated, he said.

“Turkey’s current account deficit came to an unsustainable level,” Şimşek said, adding that the economy administration is also working on the structural reforms to bring down the skyrocketing current account deficit. “Privatization is also structural reform,” he said.

According to Şimşek, weaker consumer demand in Europe, unrest in the Middle East and North Africa, and rising oil consumption have played an important role in Turkey’s rising current account deficit.

Turkey’s energy imports will top $50 billion this year and in 2012, Şimşek said. “It is not possible to change this figure in the short term,” he said.

The minister also said the country was readying to enact a law against the black market business activity.

“Turkey has succeeded well so far throughout the global economic crisis,” whereas the rest of the world is going through leveraging difficulties, said David Bonderman, founding partner of TPG Capital as he was speaking at yesterday’s conference.

“The developed world will not get any better,” and if there would be no solution found the ongoing European economic crisis, “the result would be a tragedy,” he said.

Still, Turkey has serious difficulty related to its current account deficit, said Ümit Boyner, president of the Turkish Industry and Business Association (TÜSİAD), adding that by the second quarter of this year, the country’s current account deficit reached more than 9 percent of the gross national income. “We expect Turkey’s economy’s to slow down to 7 percent by the end of this year,” she said.

Turkey not a mentor
“Every man is the architect of his own fate,” said Ali Babacan, deputy Turkish prime minister referring to the United States’ Federal Reserve stimulus package of $400 billion.

Turkey will continue to implement strong fiscal discipline while working toward slashing the country’s current account deficit, Babacan said, speaking at the conference.

Talking on the ongoing Arab Spring, Babacan said, “We do not want to act like a mentor to Arab nations; we only have to share our experiences with them.”

Babacan also said the Turkish government’s plan was to make Istanbul one of the 10 biggest financial centers in the world by 2023, adding that Turkey offered great opportunities with its domestic markets and geographic position.

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