News
Holding company leaves door open for LetterOne affiliate to buy 13.8% of Turkish telco.
Cukurova Holding has opted not to acquire a 13.2% stake in Turkcell from Alfa affiliate LetterOne, it emerged on Monday.
Sources cited by Reuters said a deadline last Friday passed without Cukurova declaring its intent to exercise a court-mandated option to buy the shares for $2.7 billion.
As per the decision of a London arbitration court, LetterOne now has the option to acquire Cukurova’s 13.8% stake in Turkcell for $2.8 billion.
If the court ruling is followed, the long-running dispute between Cukurova and LetterOne regarding their respective sakes in the Turkish operator could finally be resolved.
LetterOne’s 13.2% stake in Turkcell was transferred to it in October 2013 by sister company Alfa Group. Alfa seized the shares, which were being used by Cukurova as collateral on a loan, when the Turkish firm defaulted on a repayment in 2007.
Meanwhile, Cukurova’s 13.8% stake in Turkcell is held by Turkey’s state-owned bank, Ziraat Bank, which agreed to provide the company with the funding to buy back LetterOne’s stake in 2014; however, a deal never materialised.
In August, a London arbitration court ruled that Cukurova must either buy LetterOne’s Turkcell shares for $2.7 billion, or sell its own stake in the company to LetterOne for $2.8 billion. The parties had until last Friday to do a deal.
Earlier this month, Russian bank VTB teamed up with Alfa Group to invest in Turkcell.
