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UPDATE 1-Turkey sets June 23 deadline for bids for Islamic lender Bank Asya
May 24, 2016 / 7:46 AM / 2 years ago

UPDATE 1-Turkey sets June 23 deadline for bids for Islamic lender Bank Asya

(Adds background, details)

ANKARA, May 24 (Reuters) - Turkish regulators set a June 23 deadline for bids in the sale of seized Islamic lender Bank Asya on Tuesday, the latest in a government crackdown on companies affiliated with a prominent foe of President Tayyip Erdogan.

The government seized Bank Asya’s assets last year, saying its financial structure and management presented a threat to the financial system. It has since been managed by Turkey’s Deposit Insurance Fund (TMSF).

Founded by followers of Fethullah Gulen, a U.S.-based Islamic cleric and a former ally of Erdogan, Bank Asya is one of more than 20 companies affiliated with the religious movement that have been targeted by the government, which accuses Gulen of attempting to overthrow the state, a charge he denies.

Bids will be accepted until June 23, with the tender to be held a day later, the TMSF said in a statement in the government’s Official Gazette.

“The tender will either be held through an auction or a negotiation, depending on the number of bids,” the TMSF said. The bank is due to be liquidated if no buyer can be found.

The tender was for the sale of a minimum of 183.6 million “A” shares, amounting to 51 percent of the bank, with an estimated price set at 0.7 lira per share, the TMSF said.

That would value the bank at around 252 million lira ($84 million). At its height, it had a market value of more than $2 billion, according to Reuters data.

The seizure prompted ratings agency Standard & Poor’s to warn about the potential for political risk, or the perception of it, to spill over into the financial system.

Bank Asya’s troubles started almost two years ago when its depositors, including state-owned companies and institutions and foreign fund managers, withdrew 4 billion lira ($1.3 billion), about 20 percent of deposits, eroding its earnings and capital base.

$1 = 2.9954 liras Reporting by Orhan Coskun; writing by Ece Toksabay; editing by David Dolan and Jason Neely

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