Application to the Capital Markets Board
Pursuant to the resolutions of our Board of Directors dated 20 April 2006 and 27 June 2006, an application has been submitted to the Capital Markets Board (“CMB”) to obtain permission in order to contemplate the merger with Koçbank A.Ş. (“Koçbank”) through transfer of all rights, receivables, obligations and liabilities of Koçbank to our Bank by virtue of dissolution of Koçbank on 27 June 2006. In the application file, the report of the court appointed expert and reports of independent auditors, Deloitte and E&Y, are submitted.
In the independent auditors’ reports, calculations are made using equity method, discounted cash flow method and market comparison method. These reports reach a merger ratio by giving higher weight to discounted cash flow method and market comparison method.
Within this context, merger ratio is proposed as 19.73% (minorities share in the merged bank will be 19.73% whereas KFS share will be 80.27%) and exchange ratio is proposed as 0.53 by way of taking the averag e of the ratios determined by the independent auditors which are considered fair and reasonable. It would be less favorable for minorities if equity method were considered in the calculation. As a result of the merger, existing shareholders of Kocbank would receive for each Kocbank share with a nominal value of 1 New Kurus, 0.53 YKB share with a nominal value of 1 New Kurus.
The proposed ratios are the ratios submitted in the CMB application and not yet approved by the CMB. Further to CMB final approval necessary announcements relating to merger shall be made.
The ratios, capital increase amount and merger transaction will be discussed and submitted for the approval of shareholders at the General Assemblies of both companies on the dates that will be announced upon approvals of the CMB and the BRSA regarding the merger application.
Yapı Kredi / 28 Jun 2006