Çukurova seeks time to buy its shares in Turkcell

ISTANBUL - Reuters

Turkey’s Çukurova Group has sought more time to pay $1.565 billion to redeem Turkcell shares from Russian telecoms firm Altimo over a defaulted loan, a British court said yesterday, a week after the court gave Çukurova 60 days to pay the sum.

Britain’s Privy Council said in an emailed statement that Çukurova had applied for an extension to until appeals have been resolved in a separate case being heard by the U.S. Court of Appeals.

Because of the dispute Turkcell has failed to hold an annual general meeting for the sixth time due to a long-running dispute between three major shareholders.

Turkey’s Capital Markets Board (SPK) will soon appoint two members to the management board of the country’s leading mobile phone company Turkcell, SPK chairman Vahdettin Ertaş repeated in an interview with the broadcaster CNBC-e yesterday.

Turkish officials said previously Ankara could intervene to resolve an impasse paralyzing Turkcell, which has been unable to agree the make-up of its board or pay dividends due to a dispute between major shareholders TeliaSonera, Russia’s Altimo and Turkey’s Çukurova.

The row centres on Çukurova’s 13.8 percent stake, which is a controlling stake due to the shareholder structure and which Altimo seized when Çukurova defaulted on a $1.35 billion loan eight years ago. However, Çukurova controls Turkcell through a complex shareholder structure in which Altimo owns 13.2 percent.

Çukurova is engaged to another lawsuit with its other partner. On Sept. 1, 2011, an International Chamber of Commerce Arbitral Tribunal awarded TeliaSonera $932 million in damages, plus interest and costs, for Çukurova’s failure to deliver to TeliaSonera the Turkcell Holding shares as required under a share purchase agreement between the parties.

TeliaSonera welcomed the U.K. court’s ruling as a stepfor resolution of lon-running dispute but said its issue with Çukurova remains unsolved.

The court decision comes after state agency the Savings Deposit Insurance Fund (TMSF) in May seized control of dozens of companies belonging to the group in connection with losses at a Turkish bank, raising concern about the group’s ability to find the necessary funds for any Turkcell purchase.