Alfa Group buys AFM's 51.9 percent shares

Alfa Group buys AFM’s 51.9 percent shares

Turkish cinema company AFM sold more than 50 percent of its shares to the Velios Ltd., a subsidiary of Russian Alfa Group Consortium Tuesday evening. The consortium is known in Turkey for its investment on Turkish GSM operator Turkcell. The estimated price of the shares is to be around $28.5 million, however, the final price will be set after closing. This led the previous owners of the company, Akdemir family and AIG Blue Voyage Fund L.P., to sell all their shares except for the 10 percent belonging to Ahmet Adnan Akdemir, AFM founder. A statement made to the Istanbul Stock Exchange (IMKB) said that 51.9 percent of AFM shares (owned by AIG Blue Voyage Fund L.P., Yalçın Selgur, Mehmet Berent Akdemir, M. Sedat Akdemir, Fatma Füsun Akdemir, Ahmet Adnan Akdemir and Yusuf Agah Tansev) were sold to Velios Ltd. for $28.5 million.

Company's market value

“The market value of the company is around $59 million but for the deal we calculated it to be $55 million. $28.5 million is not the final price, it may change after closing agreements,” CEO Akdemir said yesterday. Ahmet Adnan Akdemir remained a shareholder of the company with 10 percent. “I am also going to remain in his position as the CEO of AFM Sinemacılık for at least two more years,” he added.

The deal also included an optional arrangement providing that Ahmet Adnan Akdemir's remaining shares will not be able to purchased within a year but later they will also be open to a sales agreement between two parties.

Alfa Group is a Russian consortium that is operating on many different business areas, including financial services, oil and gas production, technology, retail trade, telecommunications and media. The consortium is known in Turkey for its investment on Turkish GSM operator Turkcell. As of April 2007, the group together with its telecommunications subsidiary Altimo holds 27 percent of Turkcell shares.

AFM is Turkey's nationwide largest cinema circuit with 183 screens around the country and the first and only entertainment company listed in İMKB since October 2004. Close to 38 percent of the company shares are offered publicly and 90 percent of these publicly offered shares are owned by foreign firms such as Morgan Stanley.BOX BOX BOX

AFM to invest more in Turkey

AFM opened its latest cinema hall in İstinye Park yesterday. Built in six months the hall cost $7 million. “İstinye Park AFM is the only cinema hall in the world that includes high definition THX, three dimensional IMAX and very high resolution Sony 4K technologies at the same time. We spent $10 million in total to build the hall and bring these technologies to Turkey,” said Ahmet Adnan Akdemir, CEO of the AFM Uluslararası Film Prodüksiyon. "The financing of the investment was provided by bank loans, leasing agreements and the fixed assets of our company. We're expecting the return of this $10 million in five years," he added.

“We'll change the understanding of cinema in Turkey,” Akdemir said. “Our second plan is to air sports games and big concerts on our cinema screens.” AFM is to continue investing in both renewing its existing facilities and in opening new halls around Turkey.