Asset sale collateral inflated, report says
Güncelleme Tarihi:
Hürriyet
Oluşturulma Tarihi: Nisan 06, 2009 00:00
ISTANBUL - The $750 million loan two state banks issued to Çalık Holding for its media acquisition was obtained "by showing the collateral as nine times higher than its actual value," a recent report has said.
A report by the Prime Ministry Supreme Audit Board, or YDK, revealed details of the loan granted by Halkbank and Vakıfbank for the purchase of the Sabah-ATV media group from the Savings Deposit Insurance Fund. Çalık was the only bidder for the group and at the end of 2007 it had offered $1.1 billion to buy the assets seized by the state.
The appraisement value of seven real estate properties worth 102.7 million Turkish Liras that was shown as collateral, was inflated to 975 million liras, according to the report. Additionally, a deficit worth $51.5 million liras has emerged despite the $450 million to be paid by partners. Habertürk was the first newspaper to reveal Halkbank’s 2007 report, after it was completed by the YDK on Jan. 29. The report included many details that had not previously been announced to the public. According to the report, it was foreseen that the partners would contribute $450 million in capital for Sabah-ATV, for which Vakıfbank and Halkbank opened $750 million loans on Apr. 22, 2008. The loan has a maturity of 10 years, including three years without payment and has an interest rate of LIBOR plus 4.85 percent. The projection that compares cash flow table and interest, amortization and pretax profit revenues as well as investment expenditures and interest and paybacks of the obtained loan has determined a deficit of $51.5 million will appear for the years between 2012 and 2015.
The report has revealed that the real estates were hypothecated at "a very high value," compared to the actual appraisement value. It said that the value for the seven real estate properties in the expert report prepared in 2007 by a private appraisal firm was 102.7 million liras. However, a first-degree mortgage worth 975 million liras was created on these seven properties. According to the report, the estates that were put in pledge belonged to Sabah-ATV and were inflated.
Although Vakıfbank and Halkbank managers defined it as a "project loan," YDK said that it is not possible to define it so. The report defined it as a medium and long-term foreign currency loan opened in the easy manner granted by the banking regulation for the boards of banks. In the report’s last section, attention was drawn to the 10-year maturity. It suggested that the situation of the firm be closely monitored, and necessary efforts be displayed to strengthen the collateral.
The report also urged closely monitoring the economic and financial conditions of the firms that operate in the other fields of the group, as Ahmet Çalık, the principal partner of the group to which the firm is affiliated is the co-debtor and joint guarantor.
The assets that are subject to pledge were also valued at a very high level, according to the report. "Securities worth 243.8 million liras, including machinery equipment covering 214.3 million liras and fittings covering 29.5 million liras, as well as license, brand and rights were also subject to pledge of assets at a very high value."
According to the YDK report, the loan opened for Turkuvaz Radyo Televizyon Gazetecilik Yayıncılık, which acquired Sabah-ATV, was granted on the condition of paying interest once in six months. The principal repayments of the loan will start on April 22, 2011, and will be made every six months. The banks will be paid $25 million each in principal repayment in maturities.
Qatar-based Al Wasaeel International Media also supplied $350 million for Sabah-ATV. For the loan obtained from Vakıfbank and Halkbank, $15.011 million was paid on Oct. 22 as first stage interest. The second interest payment will be made on April 22.
The Sabah-ATV sale created controversy as Çalık Group was perceived as being "pro-government," due to the fact that Prime Minister Recep Tayyip Erdoğan's son-in-law is a top executive of Turkuvaz.
The appraisement value of seven real estate properties worth 102.7 million Turkish Liras that was shown as collateral, was inflated to 975 million liras, according to the report. Additionally, a deficit worth $51.5 million liras has emerged despite the $450 million to be paid by partners. Habertürk was the first newspaper to reveal Halkbank’s 2007 report, after it was completed by the YDK on Jan. 29. The report included many details that had not previously been announced to the public. According to the report, it was foreseen that the partners would contribute $450 million in capital for Sabah-ATV, for which Vakıfbank and Halkbank opened $750 million loans on Apr. 22, 2008. The loan has a maturity of 10 years, including three years without payment and has an interest rate of LIBOR plus 4.85 percent. The projection that compares cash flow table and interest, amortization and pretax profit revenues as well as investment expenditures and interest and paybacks of the obtained loan has determined a deficit of $51.5 million will appear for the years between 2012 and 2015.
The report has revealed that the real estates were hypothecated at "a very high value," compared to the actual appraisement value. It said that the value for the seven real estate properties in the expert report prepared in 2007 by a private appraisal firm was 102.7 million liras. However, a first-degree mortgage worth 975 million liras was created on these seven properties. According to the report, the estates that were put in pledge belonged to Sabah-ATV and were inflated.
Although Vakıfbank and Halkbank managers defined it as a "project loan," YDK said that it is not possible to define it so. The report defined it as a medium and long-term foreign currency loan opened in the easy manner granted by the banking regulation for the boards of banks. In the report’s last section, attention was drawn to the 10-year maturity. It suggested that the situation of the firm be closely monitored, and necessary efforts be displayed to strengthen the collateral.
The report also urged closely monitoring the economic and financial conditions of the firms that operate in the other fields of the group, as Ahmet Çalık, the principal partner of the group to which the firm is affiliated is the co-debtor and joint guarantor.
The assets that are subject to pledge were also valued at a very high level, according to the report. "Securities worth 243.8 million liras, including machinery equipment covering 214.3 million liras and fittings covering 29.5 million liras, as well as license, brand and rights were also subject to pledge of assets at a very high value."
According to the YDK report, the loan opened for Turkuvaz Radyo Televizyon Gazetecilik Yayıncılık, which acquired Sabah-ATV, was granted on the condition of paying interest once in six months. The principal repayments of the loan will start on April 22, 2011, and will be made every six months. The banks will be paid $25 million each in principal repayment in maturities.
Qatar-based Al Wasaeel International Media also supplied $350 million for Sabah-ATV. For the loan obtained from Vakıfbank and Halkbank, $15.011 million was paid on Oct. 22 as first stage interest. The second interest payment will be made on April 22.
The Sabah-ATV sale created controversy as Çalık Group was perceived as being "pro-government," due to the fact that Prime Minister Recep Tayyip Erdoğan's son-in-law is a top executive of Turkuvaz.