Posted by Joshua on Thursday, May 1st, 2008
Photo: Israeli Prime Minister Ehud Olmert shakes hands with U.S. Treasury undersecretary for terrorism and financial intelligence Stuart Levey (R) March 4, 2007 in Jerusalem, Israel. (Photo by Moshe Milner/GPO via Getty Images)
U.S. pressures Turkcell to abandon Syria deal
Wed Apr 30, 2008 2:13pm BST
By Khaled Yacoub Oweis
DAMASCUS (Reuters) – The United States is putting pressure on Turkish mobile phone operator Turkcell to abandon a $1 billion takeover of a cellphone company owned by a Syrian tycoon targeted by U.S. sanctions, diplomats and Arab financiers said on Wednesday.
The U.S. Treasury Department is warning American investors in Turkcell TCELL.IS (TKC.N: Quote, Profile, Research), which is listed on the Istanbul and New York bourse, about the company’s plan to buy the leading Syrian operator Syriatel, they told Reuters.
Syriatel is at least 69 percent owned by Rami Makhlouf, the cousin of President Bashar al-Assad. Washington imposed high profile sanctions on Makhlouf in February for alleged involvement in public corruption in Syria as relations between the Damascus government and the United States plummeted.
“The U.S. Treasury communicated indirectly with U.S. investors in Turkcell to reconsider the deal and hinted that there could be legal implications of doing a business transaction involving a huge amount of dollars upfront with Rami Makhlouf,” one of the diplomats following the deal told Reuters.
The sanctions explicitly state no U.S citizen can do business with Makhlouf. Several Turkcell executives have American citizenship and hold shares in the company, industry sources said.
Makhlouf, 39, has denied the U.S. charges, saying he does not have assets in the United States and his businesses that employ thousands of Syrians are legitimate.
“America is serious about making the sanctions against Rami (Makhlouf) stick. The way the Treasury is applying the pressure is through whispering to investors’ ears,” said the diplomat.
Makhlouf, Syria’s most powerful businessman, stands to receive close to an estimated $1 billion in cash if the deal for Turkcell to buy most of his shares goes ahead. The U.S. pressure has contributed to the delay in the deal, the sources said.
Turkcell said this month that “any possible U.S. citizenship” by its management would not affect the talks, despite the sanctions against Makhlouf, which were imposed while the deal was being negotiated.
“We are aware of the situation between the United States and Syria. But since Turkcell is a Turkey-based company and there is no legal restriction on the purchase of Syriatel, the situation does not have any impact on the talks,” Turkcell said.
Sureyya Ciliv, Turkcell’s chief executive officer, said in late February that he had expected to complete talks with Syriatel in a month.
A senior Arab banker said the deal could still be signed after Turkcell negotiated a lower price following the sanctions on Makhlouf.
“The Americans have succeeded in delaying the deal, but it is still on,” the financier said.
Gulf mobile operator Zain (ZAIN.KW: Quote, Profile, Research) has said it was also interested in buying Syriatel. Saad al-Barrak, Zain’s chief executive, last week described competition to acquire Syriatel as strong but he could not be drawn on the status of any talks.
A Turkcell-Syriatel deal would be one of the largest in the region’s telecom sector. The two companies say they have a majority share of the market in their respective countries.
Political stakes are also high. Syria has been rebuilding ties with Turkey strained by Syria’s support for Kurdish separatists a decade ago, and Turkey has been mediating to relaunch peace talks between Israel and Damascus.
Turkish Prime Minister Tayyip Erdogan was in the Syrian capital on Saturday to open a large Syria-Turkish business forum. Makhlouf has said that a deal with Turkcell would further improve relations with Turkey.
High-level politicians from both countries have been consulted on the takeover, the diplomats said.
“The fate of this deal has strategic ramifications for relations between Syria and Turkey and the American-led drive to isolate Syria,” another diplomat said.
The United States imposed sanctions on Syria in 2004 for supporting anti-U.S. groups in the Middle East. The Treasury Department designated Makhlouf under an expansion of the sanctions announced in an executive order by President George W. Bush on February 13 as “a regime insider whom improperly benefits from and aids the public corruption of Syrian regime officials.”
The order freezes any assets Makhlouf holds under U.S. jurisdiction and forbids American citizens or entities from doing business with him.
Price of bread to remain unchanged: There is a political decision not to increase the price of bread and of basic food items, Prime Minister Naji Al-Otri said, amid growing concerns over spiralling food prices. Read
Economic Intelligence Unit: 29 Apr 2008
The Syrian government has revised upwards the official procurement prices for the country's main crops, notably wheat, in a bid to stimulate higher production and cut down on smuggling, as farmers and traders have been lured into taking advantage of higher prices in neighbouring countries. In the face of rising prices for most foodstuffs in local markets, the government has also slapped a ban on exports of tomatoes until the end of May.
These measures show that, even though Syria meets a large portion of its food requirements, with agriculture accounting for some 24% of GDP, it is by no means immune to the effects of global food inflation. Syria claims to be the only Arab country to be self-sufficient in wheat, and since 2001 has become a significant exporter of this staple crop. However, the last two harvests have been disappointing, as a result of poor weather conditions, and the government faces the risk of available domestic supplies being further constrained by smuggling as the fixed price paid to farmers has failed to keep pace with the rapid increase in international wheat prices. The cabinet accordingly announced on April 15th that the procurement price for hard wheat was to go up to S┬ú16,500 (US$360) per tonne and that for soft wheat to S┬ú16,000/t. The prices have been fixed for several years at Syp 11,800/t and Syp10,080/t respectively. Prices for barley and maize have beenvirtually doubled to Syp 11,800/t and Syp10,080/t respectively. Prices for barley and maize have beenvirtually doubled to S┬ú15,000/t, the cotton price has risen by 30% to Syp 35,000/t, and the price for sugar-beethas gone up by a similar margin to syp 3,500/t.
Prior to 2007 the price that Syria's state-owned General Establishment for Cereals Trade and Processing (Hoboob) paid to farmers for their wheat was comfortably above world prices. However, that situation has been turned around, and even with the latest increases the government procurement price is still some way short of the current world market price of some US$440/t. Farmers have been turning increasingly to private traders to buy their wheat, rather than selling to Hoboob. In announcing the new prices, the government said that it would seek to stamp out the activities of private wheat traders.
Syria's wheat production ranged between 4.7m t/y and 4.9m t/y between 2001 and 2005, but it slipped to about 4.2m tonnes in 2006 and to barely 4m tonnes last year. In the meantime, consumption has been rising fast, partly as a result of the influx of Iraqi refugees, and reached an estimated 4.7m tonnes in 2007. Syria has only been able to meet its export commitments through drawing on its stocks, which have shrunk from over 5.1m tonnes in 2005 to less than half that figure now. In 2007 Syria exported 1.2m tonnes of wheat to Egypt, Jordan, Iraq and Turkey, bringing in revenue of some US$270m, according to the government. Export volumes are likely to be significantly lower in 2008….
Mortgages for Syrians
Dubai, UAE, April 20, 2008 – Amlak Finance, the largest real estate financier in the Middle East, announced today the signing of a Memorandum of Understanding (MoU) with Cham Holding, with the objective of making available Amlak's innovative and pioneering home finance solutions in the Syrian market. The new venture, to be called "Amlak Finance Syria", marks another feat in Amlak 's ambitious expansion plans across the region, which is currently operational in Egypt, Saudi Arabia and will launch in 2008 in Jordan and Qatar.
"Syria has witnessed a major real estate boom in the past few years, and as a leading financier in the region we are delighted to announce our partnership with Cham Holding, in order to make available our innovative and pioneering home financing solutions and services in the Syrian market," said H.E. Nasser Bin Hassan Al-Shaikh, Chairman of Amlak Finance. "Amlak is swiftly gaining a solid ground in the region following its market leadership in the United Arab Emirates, which will ultimately re-enforce the company's strong brand positioning across the Middle East."
Regional investments into the Syrian economy, coupled with the government's introduction of a series of regulations to organize wealth sectors, notably the passing of Investment Law (10) and the drafting of the Real Estate and Mortgage laws, have placed Damascus as a regional center for real estate investment activities. All such positive factors led to a soaring 80% increase in real estate turnover in 2006, reaching US$50billion.
Commenting at the signing ceremony, Mr. Nabil Al Kouzbari, Chairman of Cham Holding, said: "The Syrian economy is one of the key emerging markets in the Middle East and North Africa region, and presents unprecedented growth opportunities. Our partnership with Amlak will result in great benefits to the Syrian citizens, and the Syrian real estate market will lend further momentum to our ambitious investment plans across the country."
According to Al-Shaikh, Cham Holding is "a key player and a reputable conglomerate in the Syrian market, and I am confident that our alliance will play a key role in the development of Syria's booming housing sector".
Ehsani 2 writes: "I have news for MR. Usama Udai: "islah" or reforming this public sector WILL NOT WORK. Why on earth should the state be in the business of running 250 businesses from making biscuits to manufacturing car tires? What a hopeless case.
Exporting of tomatoes was banned for 45 days. As prices reached syp 60 a kilo internally, the government decided to ban exports. The end result is very unhappy farmers who clashed with police in Tartous (Syria-News)
Iraq and Syria have signed a transit agreement to expedite the transfer of imported food commodities from the Syrian ports by surface transport to the western provinces of Iraq, which are adjacent to the Syrian border. As part of the deal, Iraq will import Syrian products that are used in the rationing system in Iraq [which was established by Saddam Hussein to alleviate the impact of the international sanctions on Iraq in the 1990s but was kept in place by the subsequent Iraqi governments since the invasion in 2003].
SYRIA | 28.04.2008
Oxfor Business Group
The latest Lebanese entrant into the market, Fransabank Syria, has just conducted a highly successful initial public offering (IPO), after receiving a licence to operate in the Syria in April 2007.
In an interview with the Lebanese press on February 29, before the IPO, Kassar said the move into the Syrian market had not been affected by the possibility of increased US pressure on Syria.
"We have entered Syria because we saw a good opportunity in this market," he said.