(Bloomberg) --

Dogus Oto sank to its lowest level in nearly four months on a closing basis after it agreed to buy a real estate firm from its parent company, a purchase that investors fear will saddle the distributor of Volkswagen AG cars in Turkey with debt. 

Dogus Otomotiv Servis ve Ticaret AS will pay 5.12 billion liras ($270 million) to purchase 93.7% of Dogus Gayrimenkul Yatirim Ortakligi AS, the real estate investment trust owned by their parent holding.

The acquisition will be financed by the VW distributor’s own cash and bank loans, according to an exchange filing on Wednesday. The company’s shares fell 10% on the news, while the REIT soared 9.9% to a record high.

“It’s hard to imagine what kind of a relationship a car distributor can have with a REIT,” said Gokhan Uskuay, a fund manager at Istanbul-based portfolio manager Allbatross Portfoy. “If regulators allow it to proceed, the purchase could turn Dogus Oto into a net debtor and hurt dividend prospects,” he said.

The Istanbul-based distributor had a net cash position of 2.8 billion liras at the end of last year. But it will emerge “indebted” with its plans to pay dividends and the decision to buy Dogus REIT, which owes a net 1.9 billion liras, according to Burak Isyar, head of equity research at Istanbul-based ICBC Turkey Investment.

The parent holding and the VW distributor didn’t immediately respond to calls seeking comment.

The car company rents its stores from the REIT unit, which means the purchase will have a “positive impact” on operational and financial goals, Dogus Oto said in the statement.

--With assistance from Taylan Bilgic and Ercan Ersoy.

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