Buy - Sell

·         KCHOL (NR)  SCRAPS PLACEMENT> Placement of 100m KCHOL shares (3.94% of paid-in capital) was withdrawn, according to an official filing, citing unsatisfactory offers. Three family members had yesterday announced intention to sell 3.94% of KCHOL, reportedly at TL9.5/shr (vs TL10 current). The planned sale would have increased KCHOL’s free float from 22% to 26%. Subject stake was worth TL1b @ yesterday’s closing price and c30 days of daily trading vol. Family has said their intention was to increase the free float and meet their own financial needs (including for charity). Comment: News still likely to create overhang on the stock despite the withdrawal. Temel Ticaret, the family’s holding vehicle, owns 42.6% of KCHOL, while family members directly own 25.9% (before this cancelled sale) and the Koc Group related foundations own 9.1%.

 

·         TCELL (BUY, TP TL13.75)> New BoD will reportedly convene on March 20 following yesterday’s replacement of three board members by the CMB. While Cukurova and Teliasonera welcomed the CMB’s intervention, Alpha said the move was forced and temporary and were looking forward to the appointment of directors by shareholders once the dispute with Cukurova is resolved. We reiterate that the dividend decision needs to be approved by TCELL’s General Assembly. This rests on the election of the “51% TCELL Holding” representative which is only possible if a 4/5 quorum is reached at Cukurova Telecom Holding’s BoD, where Alfa and Cukurova are still in dispute. While the CMB’s intervention was required according to legislation, it does not ensure distribution of TCELL dividends.

 

·         HALKB (HOLD: TP TL18.72) > Initiated the process to operate in participation (Islamic) banking. Comment: This is an official step following recent news suggesting state banks might operate in participation banking. Therefore, we do not expect the news to have any material impact on the share price tdy.

 

·         CCOLA (BUY; TP TL46.8) > Agreed with TCCC to amend the shareholders agreement of Coca-Cola Beverages Pakistan Limited (CCBPL) => new agreement fulfills the IFRS-10 requirements for CCI to fully consolidate CCBPL in its financials, as of Jan 1, 2013. Prev, CCI was consolidating CCBPL @ a rate of 49.39%; in line with its stake in the company. As a result of the chng, the share of Pakistan in int’l unit sales will incr from 32% in 2012 to 46% in 2013E. Its share in total unit sales will incr from 11% in 2012 to 21% in 2013E. We exp CCI’s int’l unit sales to incr by 61% (31% prior to the accounting chng) in 2013 on the back of this accounting chng. The chng is technical and does not have any impact/implication on CCI’s valuation.

 

·         TAVHL (BUY; TP TL15.61) > Reportedly, Fraport mgmt said they would bid for the new Istanbul Airport tender, as part of a three-member consortium whose second member would be IC Ictas Holding. Fraport and IC Ictas jointly operate the terminals at Antalya Airport. Comment: Fraport is likely to emerge as one of the major competitors to TAV Airports in the third airport tender but we still think TAV Airports is the most likely winner given its integrated structure and know-how, as well as the incumbent status.

 

·         AKSEN (HOLD, TP: TL4.35) > Purchased 93% stake in wind power generation plant with a 35MW generation capacity from Kazanci Holding for TL126.4m. Valuation seems reasonable.

 

·         TTRAK (BUY; TP TL58.25) > Officially announced that it will borrow €75m to finance its investments in new facilities in Sakarya. The Co plans to borrow €30m from EBRD and the remaining €45m from a group of banks, as a syndicated loan. Plans were already communicated by the company mgmt earlier; hence, we exp no impact on share price tdy.