Aselsan Aims Initial Public Offering in 2014
Cengiz Ergeneman, General Manager of Aselsan, met with members of the press for breakfast following the opening of the KAE plant at the capital of Kazakhstan, Astana. Cengiz Ergeneman gave important information regarding the agenda. Mentioning that Aselsan is preparing to invest on a 400 decare land in Temelli, Ankara, Ergeneman said: “With the capabilities we will have gained in the future from the on-going implementation of Low and Medium Altitude Air Defence Systems, we will be testing and manufacturing them at this site.”
Ergeneman: “We plan to increase our capital. We will undertake an initial public offering in 2014.”
Indicating that exports have increased in the past, Ergeneman noted that exports had approached 200 million dollars and that their main objective was to be in a position of undertaking 25 percent overseas sales in the sales target of one billion dollars. Stating that accomplishing this target is not as easy as it appears, Ergeneman continued by saying: “Overseas sales take place either by providing accreditation or very little advance is provided. It is not like the domestic market. We can receive a 25-30 percent advance in the domestic market and can complete the job. When overseas sales began to increase a need for working capital appeared. We are talking about sales of one billion dollars. When we say increase this by 15 percent the following year, this is equivalent to 150 million dollars. This amount is nearly the value of a firm. Therefore, aside from organic growth, it is necessary for Aselsan to purchase and sell new companies and for this it requires a larger amount of working capital. After the required approvals, our board of directors adopted a decision to increase Aselsan’s capital. We searched for an intermediary company for this purpose. A part of our shares has been purchased domestically and a part purchased overseas. For this reason, we asked for a proposal from a domestic intermediary firm together with an overseas intermediary firm. We asked that the 10 domestic firms and 10 overseas firms we identified form a partnership and submit to us a proposal under the pilot domestic firm. We gathered the proposals. From our point of view, the most suitable proposal made was the consortium between Halk Yatırım and Merrill Lynch under the leadership of Halk Yatırım. At this point Merrill Lynch made certain statements by itself. It is not a question that we were left in the dark once they rejected this work. There are four-five other consortiums on the list. We will negotiate with them. There is no delay in the calendar. If there is no extraordinary or negative economic situation, we plan to go forward with an initial public offering in March-May 2014.”
Cengiz Ergeneman: “The Long-Range Air Defence System must be National.”
Noting that the Long-Range Air Defence System must be a national one, Aselsan General Manager Cengiz Ergeneman went on to add: “The Undersecretariat put pressure on firms that participated in the procurement of this project on subjects such as increasing the local contribution rate and technology acquisition. These firms negotiated with many firms including us and submitted bids. However, the bids were more in the nature of increasing local contribution and not in the manner of gaining a large technological infrastructure. If Turkey wants to acquire a system that it dominates, we need to build this system ourselves. At the present time, after completing the Low and Medium Altitude Defence System, with the know-how we will have gained, we can move on to the Long-Range Air Defence System. The main component of these systems is long-range radar. In the ship project that we are implementing, we are developing a radar related to this that we call ÇAFRAD. This is a high altitude radar. Thus, we will build this radar for the air defence frigate. After we build this radar we will be in a position to identify and monitor certain air threats.”
Stating that countries do not want to provide critical information on long-range missile systems, Ergeneman said: “If we want to have control of everything, if we say, “let it be particular to us, let it be under our control,” we have no choice but to design it ourselves. Otherwise, whichever system we buy there is the possibility that we will be stuck with the design of that system. Turkish engineering strength has the ability to accomplish this. Indicating that these type of systems take a considerable long time, Ergeneman said that they had briefed the relevant authorities on this subject.
