Are we close to a solution at Turkcell?

According to Reuters’ Aslı Kandemir, Turkey’s Çukurova Holding is determined to recover a disputed stake in Turkcell from Russian partner Altimo and is seeking a loan of up to $2 billion to do so.

Altimo appropriated the 13.8 percent Turkcell stake, which carries controlling rights in Turkey’s largest mobile phone operator, after Çukurova defaulted on a $1.35 billion loan in 2005. Çukurova had put the stake up as collateral for the loan.

Britain’s Privy Council ruled last week that while Altimo was entitled to take over the stake, Çukurova also had the right to recover it if it paid the outstanding loan plus interest and costs.

The court has yet to set the terms under which Çukurova can recover the stake and requested more information from both sides to help it reach a decision.

“Çukurova argues that the amount of debt has to be escalated by global borrowing rates, which will end up around $1.8 - 1.9 billion,” one of the sources told Reuters.

“Altimo reckons it should be escalated by default rates bringing the amount up to $2.5 billion,” the source said.
The near six-year disagreement between Turkcell’s major shareholders has left the mobile phone operator unable to agree to the composition of its board, distribute dividends or pursue a coherent growth strategy.

The source said Çukurova was negotiating with more than one lender for the $2 billion loan and Karamehmet, whose interests range from energy and construction to satellite television and newspapers, may pledge his holdings in oil firm Genel Energy or steelmaker Noksel Çelik Boru as collateral.

Altimo holds 13.2 percent of Turkcell. Nordic telecoms group TeliaSonera holds 37 percent, while the remaining 34 percent is largely a free float.

Turkcell shares closed at 10.95 lira on Feb. 5, valuing the firm as a whole at 24 billion lira ($13.7 billion). At that price, the 13.8 percent stake is worth some $1.9 billion.

However, it seems the dispute with TeliaSonera will linger for a while. Recently, the CEO of Telia Sonera, Lars Nyberg, resigned after he cleared his name and the company of an alleged money-laundering case.

Karamehmet will definitely use this scandal against TeliaSonera in Turkey through its own media outlets to create negative publicity for TeliaSonera in an effort to obtain the government’s backing for the management of Turkcell.

So unfortunately we are still far away from a settlement in Turkcell. It is a pity that the biggest telecommunications company of Turkey is in constant turmoil.

I believe that Çukurova, TeliaSonera and Altimo could have made a great team if they could work in harmony but when billions are at stake no one tends to be cooperative.