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Turkcell's owner risks losing control
21 February 2012
Cukurova Holding to pay $1.4bn or lose controlling stake in Turkish mobile group
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Cukurova
Turkcell
Alfa
Altimo
TeliaSonera
Turkey
The Cukurova group, owner of Turkcell, has to pay $1.4 billion in March2012 or lose its controlling stake, reports the Financial Times, citing a court ruling.
Cukurova chairman Mehmet Karamehmet is fighting for the control of Turkcell with fellow shareholders Alfa Group of Russia and TeliaSonera of Sweden, while Turkcell itself denies involvement in the dispute. Karamehmet said Cukurova would appeal against the court order.
In December 2011, the British Virgin Islands court directed Cukurova to pay the $1.4 billion into court within 90 days, if a July 2011 court decision was not effective immediately. According to the earlier decision Cukurova defaulted on $1.4 billion loan to Alfa, and so Alfa was entitled to the shares offered as collateral. This would remove Cukurova's control of Turkcell, said the report. However, the court said Cukurova could retain control of those shares by paying $1.4 billion into an escrow account of the court in March. Cukurova has to pay Alfa $1.4 billion even if it wins the case.
Alfa's telecoms subsidiary Altimo said: "We are aware of this court order. If Mr Karamehmet does not deposit the funds we will be able to take the shares."
Karamehmet sold nearly half its controlling stake in Turkcell to Alfa in 2005, with the remaining stake acting as collateral on the loan. He claims Cukurova tried to pay off the loan in 2007, but Alfa maintains entitlement to the shares.
TeliaSonera has accused Cukurova of going back on an agreement to sell Turkcell shares to it. Karamehmet denied these claims, but the arbitration tribunal of the International Chamber of Commerce directed Cukurova to pay TeliaSonera $932 million plus interest, said the FT report. Resolution of Cukurova , Altimo and TeliaSonera's dispute on composition of the group's board was delayed by Turkey's new corporate governance rules on independent board members. GTB
Further reading from Global Telecoms Business:
Turkcell and Telekom Austria eyeing Vivacom 18 Jan 2012
Turkcell owner to bid for Zain stake 13 Jan 2011
Operators plan Middle East cable 20 Dec 2010
Turkcell launches German MVNO 11 Oct 2010
Interview: Sureyya Ciliv of Turkcell 26 Jan 2010