Turkey’s Çukurova gets more time to recover Turkcell stake

ISTANBUL/LONDON

Mehmet Emin Karamehmet, Chairman of the Board of Directors of Çukurova Holding, is seen in this file photo. DHA photo

Turkey’s Çukurova group has been given an extension without a cut-off date to pay the $1.57 billion needed to recover a stake in Turkey’s biggest mobile operator, Turkcell, from Russian group Altimo, the British Privy Council said July 29 in a written statement.

The court said starting July 29, Çukurova would not pay interest to Altimo while a separate case that could prevent it from putting up the Turkcell stake as collateral in any new loan is ongoing in New York.

The Privy Council ruled July 9 that Çukurova Group must pay $1.57 billion within 60 days to Altimo to redeem Turkcell shares over a defaulted loan, in a step to end an eight-year dispute between major shareholders, but Çukurova later applied to the court for an extension until appeals have been resolved in a separate case being heard by the U.S. Court of Appeals.

“The overriding aim of the steps in the New York proceedings is simply to thwart redemption in Altimo’s own interests. It is therefore unrealistic to treat the application as an ordinary claim for an extension of time by mortgagors seeking to redeem. Çukurova is being intentionally and very seriously hampered by ATT in their attempts to raise money,” the court said July 29.

Russia’s Altimo, Turkey’s Cukurova and the Nordic Telia Sonera have been in dispute over the control of Turkcell for years.

Çukurova has problems in Turkey

Çukurova Holding is facing separate debt problems with Turkey’s Savings and Deposit Insurance Fund (TMSF) seizing 10 more group companies on May 24.

To many critics, the sale of the seized companies is highly open to question.

Ciner Group, a local holding active in a broad range of businesses from energy to mining, agreed to buy Show TV, one of the Çukurova group media assets put on sale by the TMSF, for 402 million Turkish Liras in June.

Three Turkish firms – Kolin, Limak and Cengiz – were then announced July 19 as acquiring daily Akşam, SKY 360 TV channel and Alem Radio from Turkish conglomerate Çukurova Group for $60 million.

No tender processes were held during these acquisitions.

Cengiz Özdemir, the new head appointed by the TMSF to the indebted conglomerate Çukurova Group’s media unit, said there was no condition requiring these assets be sold by a tender, during an interview with Turkish daily Radikal yesterday.

“If a tender process were held, the state would have lost a lot financially in the first place. And secondly, the most valuable assets of Çukurova would have been sold, although some others couldn’t. We have provided an environment in which not even one media asset of the group has closed, [all are] still operational right now,” he said.

Özdemir noted that the TMSF was a lot like an intermediary between potential buyers and Çukurova Group. “The TMSF directs potential buyers to the group to negotiate bilaterally. When they reach a common point in their talks, they call on the TMSF to declare its recommendation. The TMSF declares its intention considering the balance of payments of the potential buyer. It is the first foundation for the TMSF to receive the payment.”