Yildiz Says Treasury Nixed Plan for Cukurova Turkcell Loan

Yildiz Holding AS said Turkey’s Treasury disapproved of its plan to get financing for Cukurova Holding AS, which is seeking $1.59 billion to repay Russia’s Alfa Group and reclaim its stake in mobile operator Turkcell.

The Treasury sent a letter yesterday to Istanbul-based Yildiz, parent of a group of companies that includes Godiva chocolates, saying it had a negative opinion on the transaction, Zuhal Seker, general manager of corporate communications at Yildiz, said in a telephone interview today, without elaborating on the reasons. A verbal notice of disapproval also came from the banking regulator, she said.

Cukurova, owned by Turkish billionaire Mehmet Emin Karamehmet, faces a July 30 deadline from the U.K.’s Privy Council to find the money to repay its debt to Russian billionaire Mikhail Fridman’s Alfa and retain its 13.8 percent stake in Turkcell Iletisim Hizmetleri AS (TCELL), Turkey’s biggest mobile-phone company. The stake was pledged as collateral for a 2005 loan agreement, and then seized by Alfa when it said Cukurova defaulted on part of that loan.

Turkcell has been at the center of a dispute between Karamehmet, Cukurova’s founder, Nordic operator and shareholder TeliaSonera AB (TLSN), and Fridman. Istanbul-based Cukurova also has interests in energy, construction, shipping and banking, and announced last month that it was in talks with Yildiz to secure the financing to repay Alfa.

Gozde Girisim Sermayesi Yatirim Ortakligi AS (GOZDE), the private-equity arm of Yildiz Holding, said state authorities didn’t give permission for its efforts to provide structured finance, according to a statement.

“We aren’t party to and can’t make any statements with regard to any applications or contacts by Gozde Girisim at the Treasury and banking regulator,” Cukurova said in a filing. “It’s natural that we will make a public disclosure should there be a development that warrants it.”

Still Time

“We have time until July 30,” Seker said, declining to make additional comment on any options Yildiz might be pursuing. The Treasury didn’t reply to requests for comment made by phone and e-mail and Cukurova officials didn’t reply to phone calls.

“The statements from Yildiz Holding at least allow us to see that the financing process is still under way and that they see a chance to resolve their differences with the Treasury,” Bora Tezguler, an analyst at Istanbul-based Ak Investment, said by e-mail. “Whether Cukurova is able to reclaim the 13.8 percent stake or not, we see dividends potentially being paid out after the first quarter of 2015.”

Turkcell has been unable to hold the annual meetings needed to approve dividend plans since 2010 because of the dispute among major shareholders.

The Russian-Turkish spat stems from a 2005 finance package totaling $3.3 billion from Alfa to Cukurova, which was seeking $2 billion at the time to repay debt to the Turkish government after the collapse of a bank it owned.

Turkcell shares rose 1.6 percent to 13.05 liras at the close in Istanbul, after earlier declining as much as 1.2 percent.

To contact the reporter on this story: Ercan Ersoy in Istanbul at eersoy@bloomberg.net

To contact the editors responsible for this story: Benedikt Kammel at bkammel@bloomberg.net Benjamin Harvey, Thomas Mulier

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