The UK’s Privy Council has granted Turkcell shareholder Cukurova more time to repay co-investor Altimo US$1.56bn plus interest to recover shares in the mobile operator.
The court decided today to give Cukurova, owned by Turkish tycoon Mehmet Emin…
The UK’s Privy Council has granted Turkcell shareholder Cukurova more time to repay co-investor Altimo US$1.56bn plus interest to recover shares in the mobile operator.
The court decided today to give Cukurova, owned by Turkish tycoon Mehmet Emin Karamehmet, a time extension without a cut-off date to recover the shares and thereby regain control of Turkcell.
However, either Cukurova or Altimo, part of Russian billionaire Mikhail Fridman’s Alfa Group, may make an application to set a cut-off date if circumstances change or after 1 December.
Today’s judgement follows an earlier ruling on 9 July, which allowed Cukurova to recover the shares, seized by Altimo when it defaulted upon loan obligations, provided it pays the Russian company the US$1.565bn within 60 days, plus further interest accruing before the payment date.
Today, the Privy Council also determined to stop interest accruing at 8% over Libor from today (29 July). The stated reason was that court proceedings in New York, brought by Alfa, are preventing Cukurova from redeeming the shares within the previously-set 60-day timeframe.
According to the court, there is “no real doubt” based upon the evidence that Alfa’s chief motive in bringing legal action in New York was to prevent Cukurova from recovering the shares.
The court noted that Swedish telco TeliaSonera, another major Turkcell shareholder, has a claim for a “substantial sum” against Cukurova. The court added that one would think it would be in TeliaSonera’s best interest for Cukurova to redeem the shares as they are worth considerably more than the amount it owes to Alfa.
“The overriding aim of the steps in the New York proceedings is simply to thwart redemption in [Alfa’s] own interests. It is therefore unrealistic to treat the application as an ordinary claim for an extension of time by mortgagers seeking to redeem. [Cukurova is] being intentionally and very seriously hampered by [Altimo] in their attempts to raise money.”
Today’s judgement marks the latest development in a long-running dispute between Turkcell’s three major shareholders which has prevented it from holding an AGM and paying dividends.
