Turkish mobile operator Turkcell to distribute 4 billion lira dividends, shareholder says

ISTANBUL

Sweden’s TeliaSonera and other shareholders in Turkcell plan to push for its first dividend in five years at a meeting this week, a 4 million Turkish Lira ($1.5 billion) windfall that could signal a thaw in a debilitating investor battle.

Shareholders in Turkey’s Turkcell have been unable to convene meetings because of years of wrangling between Russian billionaire Mikhail Fridman and Mehmet Emin Karamehmet, one of Turkey’s richest men, for control of the company.

Under Turkcell’s complex share structure, Fridman’s Alfa Group, Karamehmet’s Çukurova Holding and TeliaSonera indirectly own the telecom’s parent, Turkcell Holdings. Control of Turkcell Holdings gives control ofTurkey’s largest mobile operator.

TeliaSonera said in a statement it and the other Turkcell Holding shareholders have agreed to propose a 3.9 billion lira ($1.5 billion) dividend at an AGM slated for March 26.

The Nordic telecom operator said the proposal was expected to be approved, given that Turkcell Holdings owns 51 percent of the telecoms company.

Shares of Turkcell rallied nearly 6 percent on the news, as investors bet on both a dividend and a potential truce between Fridman and Karamehmet’s companies.

“We think that the joint agreement of three shareholders on the dividend amount increases the probability of an AGM approval on March 26,” Toygun Onaran, an analyst at TEB Investment, said in a note to clients. “We deem the news very positive for Turkcell.”

Alfa’s London-based vehicle said in a statement the agreement was a “first positive step” towards settling issues at Turkcell.

“Our hope is that the deadlock will shortly be resolved completely and corporate governance restored, and foreign investors in Turkish companies will be welcomed by the Turkish government,” it added.

The announcement comes a week after Alfa offered $2.8 billion to buy back an almost 14 percent stake in Turkcell from cash-strapped Cukurova, a deal analysts said would likely be blocked because of Ankara’s opposition to a market leader falling into foreign hands.

Separately, Turkcell said in a regulatory statement TeliaSonera had transferred its 47 percent stake in Turkcell Holding to a Finnish affiliate.