Russia's Alfa Group reportedly shuns greater stake in Turkcell mobile operator

By bne IntelliNews November 29, 2016

Russia's Alfa Group, controlled by billionaire Mikhail Fridman, did not exercise its option to acquire a controlling stake in Turkcell mobile operator before its expiry on November 28, Bloomberg reports, citing unnamed sources close to the deal.

LetterOne (L1, former Altimo, telecom investment branch of Alfa) was close to resolving a 10-year-long corporate stalemate with the Turkish Cukurova group over control of Turkcell, with a joint venture of the two companies (51% Cukurova and 49% Altimo) buying 53% in Turkcell in 2005 for $1.59bn.

Altimo also lent $1.7bn to Cukurova, with the loan secured by 51% in the joint venture, and it later accused Cukurova of breaching the agreement. This eventually led to a court decision in London obliging Cukurova to either buy out Altimo's (now L1) stake in Turkcell for $2.7bn or sell its stake to Altimo for $2.8bn.

Reportedly, Cukurova missed the deadline to either buy or sell the stake, and it was up to Fridman now to act until November 28. Bloomberg previously reported that Alfa could move to buy out a 13.8% stake in Turkcell from Cukurova.

Analysts surveyed by Vedomosti on November 8 estimated that Alfa's LetterOne Technology investment vehicle (L1, former Altimo) had enough funds to buy out the stake in Turkcell.

Unnamed sources familiar with Alfa Group management told the daily that the investment group leveraged the support of state-controlled VTB Bank to solve the corporate conflict on the state level, which could be linked to Cukurova missing the important deadline.

In the third quarter of 2016, Turkcell had 66.7mn subscribers in Turkey, Belarus, Kazakhstan, Azerbaijan, Georgia, Moldavia, Germany, Ukraine, and Cyprus, with 34.5mn clients in Turkey alone. The company made $1.2bn in revenues in the third quarter of 2016 with Ebitda of $60mn.

The London-based L1 recently announced the expansion of its telecom portfolio, planning to invest $2bn-$3bn in tech companies in medium to mature development stages. L1 aims to invest in developing technology companies capable of reshaping existing business models while finding synergies with traditional telecom operators, the group said.

Alfa Group holds the largest stake of 47.9% in Vimpelcom, one of the three biggest Russian mobile operators, through L1.

Related Articles

Fitch upgrades Moscow-based International Investment Bank to “BBB”

Fitch Ratings upgraded the long-term foreign currency Issuer Default Rating of the Moscow-based International Investment Bank to “BBB” from “BBB-” with a stable outlook, in the agency’s ... more

Poland’s PGNiG sues Brussels over Opal deal with Gazprom

PGNiG has launched a legal challenge to the European Commission’s decision to offer Russian gas exporter Gazprom increased transmission capacity on the German Opal pipeline that brings exports sent ... more

Russia's Rosneft scraps last major project with ExxonMobil

Russia's largest oil company Rosneft and US hydrocarbon major ExxonMobil have given up joint extraction development in the Gulf of Mexico, following the  abandonment of Arctic their planned ... more

Register here to continue reading this article and 2 more for free or 12 months full access inc. Magazine and Weekly Newspaper for just $119/year.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

IntelliNews Pro subscribers click here

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

Thank you for purchasing a bne IntelliNews subscription. We look forward to serving you as one of our paid subscribers. An email confirmation will be sent to the email address you have 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.

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:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

IntelliNews Pro subscribers click here

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

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

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

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss