Turkish authorities seize Rumeli assets

Turkish authorities seize Rumeli assets
Published: 18 February 2004

The Turkish Savings & Deposits Insurance Fund has seized 219 companies belonging to the Uzan family in order to try and recover debts of in excess of US$5,500m.  The Turkish judicial authorities are seeking the extradition of a number of leading members of the Uzan family that have fled to the United States.  The Turkish Savings & Deposits Insurance Fund has split the companies seized into four categories, media, telecommunications, finance and cement and has appointed separate trustees to manage the four business groups, pending their eventual sale. 

The cement operations consist of the Rumeli Çimento group, consisting of nine integrated cement works and one grinding station in Turkey with a combined capacity of some 6.2m tonnes as well as a slag cement plant in Poland.  The Rumeli cement works are believed to have tended to operate at much lower levels of capacity utilisation than the Turkish cement industry in general.  The action by the Turkish Savings & Deposits Insurance Fund has been received favourably by other operators in the industry, that have been pointing out that pricing by the Uzan-controlled group has been erratic and undercutting others, both in the domestic and export markets, as cash flow was required to service the excessive debt.  It is now expected that the recovery in domestic prices over the past twelve months can be sustained, as Rumeli has been seen as the greatest risk to maintaining current price levels, some 50% higher in US dollar terms than a year ago but still well below European levels.