Cukurova hunting $2bn loan as it pushes to recover Turkcell stake

By bne IntelliNews February 6, 2013

bne -

Following a UK court ruling handing it the right to buy its stake in Turkish mobile operator Turkcell that had been seized by Russia's Altimo, Cukurova Holding is scouting around for a $2bn loan, newswires reported unnamed sources as saying on February 5. However, sources say the two sides' valuation of that Turkcell stake is at least $700m apart.

Apparently determined to take the stake back, Cukurova is now negotiating with more than one lender for the cash, according to sources cited by Reuters. Cukurova owner Mehmet Emin Karamehmet could pledge holdings in oil firm Genel Energy or steelmaker Noksel Celik Boru as collateral, they claim.

Cukurova has been tussling with Altimo - the telecommunications arm of rapacious oligarch Mikhail Fridman's Alfa Group - over the 13.8% Turkcell stake ever since the Russian company seized it in 2005 after the Turkish stakeholder defaulted on a $1.35bn loan. In a final ruling, the UK Privy Council said on January 30 that Cukurova should have the option to buy back the shares, which currently give Altimo a controlling stake in Turkcell.

While the court ordered the Turkish holding be given the opportunity to recover the stake "on appropriate conditions," it said it needs more information from the two sides before it can make a final decision on "the basis and terms of such relief." Unsurprisingly, sources claim that there is some distance between the two sides. "Cukurova argues that the amount of debt has to be escalated by global borrowing rates, which will end up around $1.8bn-1.9bn," one said. "Altimo reckons it should be escalated by default rates, bringing the amount up to $2.5bn."

However, with the price of Turkcell shares having been held back for years by the dispute, as well as clear determination in Ankara that control of the country's biggest mobile operator should not end up in Russian hands, Karamehmet is reportedly ready to do whatever he must to reclaim the shares. "Cukurova would not want to lose control over Turkcell so it will pay whatever amount the Privy Council sets," a second source was reported as saying, highlighting the upside potential of Turkcell shares once the shareholder dispute is resolved.

Related Articles

Drum rolls in the great disappearing act of Russia's banks

Jason Corcoran in Moscow - Russian banks are disappearing at the fastest rate ever as the country's deepening recession makes it easier for the central bank to expose money laundering, dodgy lending ... more

Kremlin: No evidence in Olympic doping allegations against Russia

bne IntelliNews - The Kremlin supported by national sports authorities has brushed aside "groundless" allegations of a mass doping scam involving Russian athletes after the World Anti-Doping Agency ... more

PROFILE: Day of reckoning comes for eccentric owner of Russian bank Uralsib

Jason Corcoran in Moscow - Revelations and mysticism may have been the stock-in-trade of Nikolai Tsvetkov’s management style, but ultimately they didn’t help him to hold on to his ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Notice: Undefined index: subject_id in /var/www/html/application/controllers/IndexController.php on line 296
Dismiss