The chief executive of Turkey’s Isbank, Adnan Bali, has said the banking group is prepared to consider strategic options for operations such as Avea, the nation’s third-largest mobile operator, that are not part of the bank’s core financial…
The chief executive of Turkey’s Isbank, Adnan Bali, has said the banking group is prepared to consider strategic options for operations such as Avea, the nation’s third-largest mobile operator, that are not part of the bank’s core financial business.
At a recent news conference, Bali said Isbank plans to use its capital in an “optimal” way and do whatever is needed if market conditions permit, noting the strategy includes Avea, in which the group has a total 10.01% stake.
Incumbent Turk Telekom owns the remaining 89.99%. A spokesperson today declined to comment on whether the company would consider buying Isbank’s stake if it becomes available.
Turk Telekom boosted its stake in Avea from 81.37% to its current 89.99% via a capital increase earlier this year, in which six Isbank companies, then owning 18.63% of Avea shares, decided not to participate.
In a 30 March statement, Turk Telekom said that, prior to the capital increase, shareholders had agreed to reduce Avea’s share capital of TL7.12bn (US$4.06bn) by TL3.3bn (US$1.88bn) to help eliminate past losses.
Turk Telekom then injected TL3.3bn (US$1.88bn) in cash into the company and paid an extra TL1.08bn (US$615.6m) premium.
Proceeds from the increase were used to repay loans Turk Telekom had granted Avea.
Commenting on Turk Telekom’s stake increase in Avea, a spokesperson said at the time: “This is a good development for Turk Telekom Group as it will strengthen our mobile arm Avea’s balance sheet and capital structure.”
According to Turk Telekom’s Q2 2012 financial results, Avea posted revenues of TL856m (US$480m) for the period – representing 13% YoY growth. Turk Telekom attributed the increase to increased data revenue and subscriber numbers and an improved tariff mix, although it conceded competition remains intense. Avea’s EBITDA increased 26% YoY to TL87m (US$48.7m).
