Clifford Chance and the Yegin Cifti Attorney Partnership (YCAP) have provided English and Turkish law advice, respectively, to Odea Bank on a TL 1.0 billion capital increase subscribed to by the IFC, the IFC Financial Institutions Growth Fund ("FIG Fund"), a private equity fund managed by IFC Asset Management Company (AMC), and the EBRD. Odea Bank is a subsidiary of Lebanon's Bank Audi Group, which received English law advice by Dechert and Turkish law advice from the Bilgic Attorney Partnership.
According to an EBRD press release, “this capital increase will provide Odea Bank with additional financial flexibility which will allow it to expand its financing in the real sector in Turkey, fund large scale infrastructure projects and increase access to finance for small and medium-sized enterprises (SMEs). Odea Bank is also planning to invest in new technologies to strengthen its digital banking network and reach one million unbanked people in Turkey."
As part of the capital increase, IFC and the EBRD are investing the Turkish lira equivalent of USD 110 million and USD 90 million respectively. IFC financing of USD 38.5 million is provided by the FIG Fund. The remaining balance will be covered by Middle Eastern investors and Bank Audi itself. Following the capital increase, Bank Audi Group will remain a majority shareholder of Odea Bank with a stake of more than 75 per cent.
Completion of the transaction is subject to regulatory approvals including approval by the Banking Regulation and Supervision Agency (BRSA) and other customary closing conditions.
Odea Bank started its operations in Turkey in late 2012 as a subsidiary of Bank Audi Group, the largest Lebanese lender and one of the leading international financial institutions with a presence in both the MENA region and Europe. As of March 2016, Odea Bank is in eighth position in the Turkish banking sector by customer deposits and ninth position by loans, excluding state-owned banks and based on BRSA unconsolidated financial statements of Turkish banks. Odea Bank operates 56 branches in 16 cities and employs over 1,500 staff.
Samir Hanna, Group Chief Executive Officer of Bank Audi Group and Chairman of Odea Bank, stated: “We welcome the EBRD and IFC, as well as other investors, as our new partners in Odea Bank. We are looking forward to a new phase of growth for Odea Bank in the highly promising Turkish banking market. This capital increase represents the largest capital increase in the Turkish banking sector over recent years and is a testimony to Bank Audi’s successful greenfield investment in Turkey. Odea Bank is a key pillar of Bank Audi’s future growth and we continue to be committed to its future development.”
Huseyin Ozkaya, General Manager and Board Member of Odea Bank, said: “It is vital and extremely encouraging that two reputable and prestigious institutions such as IFC and the EBRD, alongside other investors, demonstrate their confidence in Odea Bank. With this capital increase, we will be able to expand our lending support to infrastructure investments and projects contributing to the development of the Turkish economy. The equity investment will also allow us to support SMEs which account for 70 per cent of Turkey's employment but receive less than 30 per cent of loans. We expect to make investments in our branch network, digital banking channels and technology in order to continue providing our corporate, commercial, SME and retail customers with the best quality service as the youngest top 10 bank in the competitive Turkish banking market.”
The YCAP team consisted of Partner Itir Ciftci and Associates Deniz Gocuk and Aras Gorkem. The Clifford Chance team was led by Partner Jared Grubb.
The Bilgic Attorney Partnership team consisted of Partner Haluk Bilgic and Associate Ekin Inal.
The Dechert team consisted of Partner Camille Abousleiman and Simon Briggs and Associate James Stonehill.
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