Turkey’s Cukurova Group has reached an agreement with Russia’s Altimo on the terms by which it may recover a disputed stake in Turkcell that would give it control over the mobile operator.
The UK’s Privy Council approved the agreement “on terms…
Turkey’s Cukurova Group has reached an agreement with Russia’s Altimo on the terms by which it may recover a disputed stake in Turkcell that would give it control over the mobile operator.
The UK’s Privy Council approved the agreement “on terms necessary to allow for the financing of the share redemption” on 24 July, according to a court statement.
Turkish state-owned Ziraat Bank has lent Cukurova, controlled by Turkish businessman Mehmet Emin Karamehmet, the US$1.6bn needed to recover the stake just a few days prior to the 30 July payment deadline, the Wall Street journal reported citing a source with knowledge of the matter.
Cukurova, Altimo and the Ziraat Bank were not immediately available for comment.
Altimo, part of Mikhail Fridman’s Alfa Group, seized the 13.8% indirect stake in 2007 after Cukurova defaulted on a US$1.35bn loan for which the shares had been pledged as collateral.
Last July, the Privy Council ruled that Cukurova, which is registered in the British Virgin Islands, could recover the stake if it paid about US$1.6bn to Altimo within 60 days. The deadline has since been extended several times.
Questions arose as to whether Cukurova would be able to make the payment to Altimo on time. In early June, the Turkish company confirmed it was in talks with various organisations about raising financing.
Earlier this year, Cukurova lost a separate Privy Council court case requiring it to pay about US$1bn in damages to Sweden’s TeliaSonera, another of Turkcell’s main shareholders.
The dispute between the three major shareholders has prevented the Istanbul-based mobile operator from convening an AGM and paying dividends since 2010.
Analysts have speculated that, if Cukurova is successful in recovering the stake, the Istanbul-based operator may finally be able to resume paying dividends. However, a successful repayment would not necessarily resolve corporate governance issues.
