Turckcell has pledged to pay off subsidiary Euroasia Telecommunications’ US$150m debt, for which it is full guarantor.
The Turkish telecoms operator said in a statement to the Istanbul Stock Exchange that, as Eurasia does not have the funds to pay…
Turckcell has pledged to pay off subsidiary Euroasia Telecommunications’ US$150m debt, for which it is full guarantor.
The Turkish telecoms operator said in a statement to the Istanbul Stock Exchange that, as Eurasia does not have the funds to pay off the debt itself, Turkcell “will be obliged to make the related loan repayment on or before 6 April 2012 as a result of the given guarantee”.
Euroasia – in which Turkcell has a 55% stake and System Capital Management a 45% stake – borrowed the US$150m from banks in 2005 to provide financing to its Ukraine-based subsidiary Astelit. Euroasia’s loan matured on 30 March and, as the Turkcell board decided not to extend its guarantee, the company breached the agreement.
On 2 February, Turkcell announced Astelit had failed to repay debt totalling about US$323m to Euroasia and Financell, another Turkcell subsidiary, thereby breaching its loan agreements. According to a statement, Astelit owed Euroasia US$150m and Financell US$173m.
Later that same day, Turkcell announced it would extend a guarantee to Financell for up to US$410.65m “in order to perform its obligations with respect to the loans granted by the banks for providing group financing”.
Turkcell said the extended guarantee covered both the US$173m loan and “other loans that Financell granted to Astelit which have not fallen due”.
