Top Turkish bus maker halts production after takeover by Swiss firm
(Updates with report of court case, loan in the second and eighth paragraphs)
TEMSA, a leading Turkish vehicle maker owned by little-known Swiss investment firm True Value Capital Partners, halted production due to financial problems. Turkey’s main opposition party asked the government to explain how it fell into difficulties.
The company will not manufacture its buses and light trucks until Dec. 23 while it carries out a stock check, Dünya newspaper said on Wednesday, without mentioning how it got the information. Sabah newspaper reported last week that several banks had opened legal proceedings against the company's owners at an Ankara court and some properties and buses had been blocked from sale
True Value Capital Partners, based in Lausanne, Switzerland, bought the company in May from Sabancı Holding, one of Turkey’s biggest industrial groups. It was one of the few investments in Turkish industry by foreign firms in 2019. The sale was made at a discounted value of 375 million liras ($65 million) to take account of debt and cash holdings, Bloomberg HT reported in May.
The main opposition Republican People’s Party (CHP) asked the government to explain to parliament how TEMSA, established half a century ago, could fall into such difficulties, questioning who else was behind the takeover and what would happen to financial incentives awarded to the firm, Dünya said.
TEMSA's workers were not admitted to the factory on Wednesday, business website Patronlar Dünyası reported. Thirty have been laid off, it said. The company employs about 20,000 people at its operations in Turkey and abroad, it added.
Turkish citizen Evren Ünver represented True Value Capital Partners during the takeover of TEMSA, saying at the signing ceremony that the company would enter a new period of expansion. Ünver is listed on the board of directors of Turkish construction company Mesa and conglomerate Gama Holding, according to the companies’ websites.
Companies in Turkey are seeing their profit margins shrink after a currency crisis last year led to a severe economic downturn. The economy is expected to grow by 0.4 percent this year, according to a central bank survey of economists and opinion leaders. The government of President Recep Tayyip Erdoğan targets economic expansion of 5 percent in 2020, a goal that may be difficult to achieve without a borrowing binge.
Sabancı took out a loan of 500 million liras on behalf of TEMSA from several banks three to five months before selling the firm, which had debts of 850 million liras, Sabah newspaper's Dilek Güngör reported on Dec. 6. Part of the loan was used to pay off debts to Akbank, owned by Sabancı, while the rest remained in the company's accounts. TEMSA held cash of 700 million liras at the time of the sale, Güngör said.
Rukiye Devres Ünver is the other partner in True Value Capital Partners, Gungor said.
TEMSA has a capacity to produce 11,500 vehicles a year, including 4,000 buses and 7,500 light trucks, at its plant in Adana in southern Turkey, according to its website. It is active in almost 70 countries.
TEMSA opened a North American branch at the start of 2019. Its biggest export market is France.