Speculator offloads Istanbul-listed Gubretas shares as price nosedives over Iran court dispute

Speculator Oguzhan Sahinkaya on January 5 sold a 2% stake in fertiliser producer Gubretas (GUBRF), or Gubre Fabrikalari, on Borsa Istanbul, a filing showed on January 8.

As a result, Sahinkaya’s stake in the company fell to 4.91%.

According to local legislation, the Central Registry Agency (MKK) informs the public when a shareholder’s stake in a listed company goes below or above the 5% threshold. The names of the shareholders that hold larger-than-5% stakes in a listed company are also disclosed.

Turkey’s Agricultural Credit Cooperative (Tarim Kredi Kooperatifleri) controls a 76% stake in Gubretas, a company launched in 1952. The remaining 23% is listed on Borsa Istanbul.

In September, Sahinkaya had an 8% stake in Gubretas.

In December 2020, Gubretas stated that it found 3.5mn ounces of gold reserves, worth $6bn, at its Sogut mining site in Turkey’s Bilecik province.

As a result, Gubretas’ share price shot up to Turkish lira (TRY) 405 ($21) as of April 12, 2023 from TRY 86 ($12) at end-2020.

On December 18, 2023, Turkey’s Capital Markets Board (SPK/CMB) announced that it had rejected Gubretas’ application to hike its capital by 300% to TRY 1bn from TRY 334mn via bonus issues.

The SPK cited uncertainties over a provision for an ongoing court case targeting Gubretas’ Iran-based unit, Razi Petrochemical Co.

In 2022, a case featuring Razi was launched at an Iranian court. Razi was accused of using excessive natural gas and it was sought for payment of TRY 6bn ($330mn) in fines.

Gubretas allocated TRY 43mn worth of provisions in its end-2022 balance sheet.

Gubretas’ share price nosedived from TRY 360 ($12) as of December 15 to TRY 154 ($5) as of January 8.

In 2008, a consortium led by Gubretas acquired Razi from the Iranian Privatisation Organisation.

Gubretas currently controls a 49% stake in Razi, while it appoints three of the five company board members.

Gubretas has an annual production capacity of 0.9mn tonnes at its two plants in Turkey, while Razi has an annual capacity of 3.6mn tonnes at its 10 plants.

In 2022, Gubretas produced 0.7mn tonnes of fertiliser, while it sold 2mn tonnes of product. Razi produced 1.2mn tonnes of fertiliser in the year and sold 0.9mn tonnes of product.

In May, Gubretas received TRY 229mn worth of dividends from Razi’s 2022 profit. For 2022, Gubretas reported a net profit of TRY 757mn.

In April, Huseyin Aydin, former general manager of government-run Ziraat Bank, was appointed chairman of Gubretas.

Both the SPK and Gubretas are controlled by the Erdogan regime. It is unknown what the exact problem is. So far, it is Sahinkaya that has been hit by the affair.