EBRD and Borsa Istanbul in exclusive talks over stake sale

The European Bank for Reconstruction and Development (EBRD) is entering exclusive negotiations to acquire a 10 percent stake in Borsa Istanbul, in a landmark deal which will support Turkey's efforts to reshape its capital markets, the EBRD has said in a statement.

Borsa Istanbul, majority-owned by the Turkish government, became the sole exchange entity in Turkey after it was created in 2013 by combining the Istanbul Stock Exchange, the Istanbul Gold Exchange and the Turkish Derivatives Exchange. 

EBRD First Vice President Phil Bennett and EBRD Director for Insurance and Financial Services Noel Edison signed a term sheet in Istanbul on May 29 with Borsa Istanbul Chairman Talat Ulussever and Borsa Istanbul CEO Tuncay Dinç, paving the way for a pre-IPO investment in the stock exchange. 

Expected to take place next year, the IPO is part of the government's comprehensive plan to reshape Turkey's capital markets and turn the country into a financial hub for the region spanning Central Asia, southeastern Europe and North Africa. 

"Borsa Istanbul is at the heart of Turkey's ambition to become a financial center for the wider region. As a shareholder in Borsa Istanbul, we will support its efforts to become a leading stock exchange in terms of the number of listed companies and market capitalization, reflecting Turkey's economic potential," Bennett said.

"This investment is part of the EBRD's long-term strategy in Turkey to help the country deepen its capital markets. We will work to improve the efficiency and liquidity of the bourse to make it more attractive to domestic companies and foreign investors and will also help with the preparations for a successful public listing," Edison added.

'Great potential'