News
Russian bank VTB does deal with LetterOne affiliate ahead of court-enforced Cukurova settlement.
Russian bank VTB this week announced it has teamed up with Alfa Group to invest in Turkcell.
The agreement was reached ahead of a deadline later this month for Alfa’s sister company LetterOne to resolve a long-running dispute with Turkish conglomerate Cukurova Holding over the pair’s respective stakes in the operator.
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 have until 18 November to do a deal.
LetterOne holds 13.2% of Turkcell, a stake that was transferred to it in October 2013 by 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.
Cukurova still owns 13.8% of Turkcell, although its shares are 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.
Meanwhile, Sweden’s Telia Company holds 37% of Turkcell.
In a statement on Monday, VTB said its agreement with Alfa "reflects its commitment to diversifying its investment and credit portfolios by working with one of the leading telecommunications companies in the fast-growing and highly profitable Turkish market."
