Turk Telekom's majority owner Otas missed a payment in September on a $4.75bn syndicated loan as the depreciation of the lira against the dollar eroded the dividends it receives in local currency and its parent company struggles in other industries, people familiar with the issue told Bloomberg on October 12.
Otas, a special purpose vehicle formally known as Ojer Telekomunikasyon, owns 55% of Turkey’s largest telecom company. Otas is a unit of Dubai-based Oger Telecom, which is owned by Saudi Oger group and Saudi Telecom Co.
Otas received the syndicated loan with maturities of 5 years to 7.75 years in 2013 to refinance and extend existing debt and pay a dividend, according to the news agency. According to the sources, the missed payment was $290mn and Otas sought an extension for payment until the end of October from 29 lenders. Akbank, Citigroup Inc., JPMorgan Chas & Co., BNP Paribas, Deutsche Bank AG and Garanti Bankasi were bookrunners and lead arrangers in the loan agreement, Bloomberg says.
“We are in discussions with Otas lenders and shareholders to ensure a solution is agreed to the satisfaction of all stakeholders,” Otas told the news agency.
Turk Telekom's net income fell by 26% y/y to TRY248mn (€73mn) in the second quarter of 2016. Turkey’s Treasury holds a 30% stake in Turk Telekom, while and 15% of the company's shares are traded on the stock exchange. Last year, the company paid out TRY841mn (or TRY0.24 dividend per share) in dividends, down from the previous year’s TRY1.84bn (TRY0.53 per share) and TRY912mn (TRY0.26 per share) in 2013. Its assets stood at TRY26.6bn as of end-June. Turk Telekom’s net debt was TRY10.5bn in Q2, up from TRY8.8bn in the previous quarter and TRY8.4bn in the second quarter of 2015.
The lira has weakened nearly 6% against the dollar this year. Shares in Turkey Telekom were up 0.53% at TRY5.65 on October 12.
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