ANKARA - A Turkish court on Wednesday blocked the sale of the country's biggest steel company, Erdemir, to a Turkish industrial group on procedural grounds, but the deal was nonetheless expected to eventually go ahead, the Anatolia news agency reported.
The Council of State, Turkey's top court for appeals against actions by the state, justified its ruling on the grounds that the Competition Board had broken the law by approving the sale with eight members instead of seven as required by law.
The board was now expected to convene with seven members and renew its decision on the company's sale, the agency said.
OYAK, an industrial group which represents the army pension fund, won the tender for a 46.12-percent stake in Erdemir with a bid of 2.77 billion dollars (2.2 billion euros) in October, beating giants such as Mittal and Arcelor, the world's number one and two steelmakers.
Under the rules of the contract, OYAK also took over a 3.17-percent share held by the public Turkish Development Bank, for 190.2 million dollars.
OYAK had also initially reached an agreement with Arcelor for the Luxembourg-based company to acquire 41.0 percent of Ataer, a company created by OYAK to purchase Erdemir, and through it, to take a 20.5-percent stake in Erdemir.
But the plans were dropped in February in order to speed up Erdemir's takeover.
OYAK signed the Erdemir acquisition on February 27 and paid the full price at that time.
Erdemir, the only Turkish flat steel manufacturer, produced 3.6 million tonnes of steel in 2004 and posted a profit of about 470.0 million dollars.
The company's sale, a key item in Ankara's privatisation portfolio and an IMF-backed economic recovery programme, has sparked strong protests by local businesses and trade unions.
05/10/2006 10:18 GMT