Seker Pilic ve Yem Sanayii AS, a Turkish poultry producer, started talks with competitor Banvit Bandirma Vitaminli Yem Sanayii ve Ticaret AS after provisional seizure proceedings were enforced by what a company executive described as “panicky” creditors.
The provisional measures imposed by creditors have “jeopardized the sustainability of live operations,” Seker, based in the northwestern town of Bandirma, said in a statement to the Istanbul Stock Exchange late yesterday. Banvit, also based in Bandirma, said today it started preliminary talks with Seker, without providing further details.
“One panicky creditor threw a stone, and then all started throwing,” Mehmet Dogan, Seker’s accounting director, said today in a phone interview. “We’ve had some overdue debt, but that’s normal for any company. This came as unexpected.”
Seker’s current ratio, which measures the ability to repay short-term debt, was 0.84 at the end of the third quarter of 2012, compared to 0.83 a year earlier, according to data compiled by Bloomberg. That compares with 1.17 for Banvit in the second quarter last year. Seker has a market value of 93.7 million liras ($53 million), less than one-fourth Banvit’s capitalization.
Banvit could hire or buy Seker’s production facilities, or acquire a stake in the company, according to Melda Agirdas, an analyst at Istanbul-based Ekspres Invest. “Banvit will see favorable prices, but it is also an indebted company,” Agirdas said in a phone interview today.
Seker Pilic shares were suspended this morning by the Istanbul Stock Exchange after falling 0.9 percent to 2.13 liras. Banvit declined 3.1 percent to 4.01 liras at the close in Istanbul, the biggest drop since Jan. 18.
Banvit had a ratio of net debt to earnings before interest, taxes, depreciation and amortization of 6.04 as of June 30, according to data compiled by Bloomberg. Acquiring a stake in Seker would bring an “extra financing burden,” Agirdas said.
Seker Deputy Chairman Osman Bor and Chief Executive Officer Emre Bor didn’t reply to phone calls and e-mails from Bloomberg seeking comment on the talks.