Çukurova seeking regain control of stake in Turkcell

Reuters

Turkcell’s general assembly in 2012, with the participation of the company CEO Ciliv, lasted only a few minutes due to the legal disputes between shareholders.

Turkey’s biggest mobile-phone operator Turkcell has played down the impact on its business of regulators’ seizure of assets belonging to its parent company, the latest development in a complicated battle for control of the telecoms firm.

Turkey’s Savings Deposit Insurance Fund (TMSF) last week seized control of 45 companies belonging to Istanbul-based Cukurova Group, which through a complex shareholding structure has held control of Turkcell through a 13.8 percent stake.

The seizures were in connection with losses at a Turkish bank and are another blow to Çukurova’s efforts to keep itself afloat and regain full control of its stake in Turkcell - now in limbo after a handful of international court rulings.

The 13.8 percent stake in Turkcell was seized by Russia’s Alfa Group, another major player in Turkcell, after Çukurova defaulted on a $1.7 billion loan.

A London court in January ruled Çukurova could recover the stake if it repays Alfa, including interest, but any signs of further weakness in the company’s finances may increase the likelihood it will not be able to do so.

The insurance fund said its takeover of Çukurova assets, including a carmaker and a TV broadcasting channel, is due to outstanding debt. It did not specify from what the arrears stemmed nor how much they totalled.

No dividends for three years

Separately, Turkcell’s general assembly is due to meet today to discuss issuing paying 2010, 2011 and 2012 dividends, which have been suspended due to the legal disputes between shareholders.

Alfa’s Altimo and Nordic telecoms company TeliaSona, Turkcell’s biggest shareholder with a 38 percent stake, have been locked in a long-running battle for control of the phone company.

Among the assets seized by the banking regulator on last Friday were Cukurova’s Aks TV, which owns national television channel Show TV.

Turkcell said it owned 8 percent of Aks TV’s main shareholder and was unaware of ownership ties with any of the other companies that were seized.

“We do not expect the TMSF’s proceedings to have a substantial impact on our activities or our financial position,” Turkcell said in the filing.

Turkcell shares rose 0.9 percent on Tuesday, in line with the main Istanbul stock index’s rise.