Cukurova Reaches Debt Deal to Reclaim Turkcell Stake, Court Says

Cukurova Holding AS of Turkey agreed to a plan that allows it to settle a $1.6 billion debt to Russia’s Alfa Group to reclaim its stake in mobile operator Turkcell Iletisim Hizmetleri AS (TCELL), ending a nine-year dispute, the U.K.’s Privy Council said.

“The parties have reached agreement on the terms necessary to allow for the financing of the share redemption,” the Privy Council said today in an e-mailed statement. The court heard the case between Cukurova and Alfa because the two partners had set up stake-ownership units in the British Virgin Islands.

Turkcell jumped 4.2 percent to 13.65 liras in Istanbul trading, the most since May 30 and the highest since 2007.

Cukurova Holding has secured financing through a combined loan and equity transaction, a person familiar with the deal, who asked not to be named because the financing component is confidential, said before the Privy Council statement.

Cukurova will receive its 13.8 percent Turkcell stake, pledged as collateral in a debt deal from 2005, ending years of dispute among shareholders of Turkey’s biggest mobile operator, the person familiar said. The financing isn’t from Yildiz Holding AS’s private-equity unit Gozde Girisim Sermayesi Yatirim Ortakligi AS (GOZDE), whose attempt to provide financing wasn’t approved by Turkey’s Treasury and banking regulator, the person said.

Turkcell has been at the center of a dispute between Turkish billionaire Mehmet Emin Karamehmet, Cukurova’s founder, Nordic operator and shareholder TeliaSonera AB (TLSN), and Alfa’s owner, Russian billionaire Mikhail Fridman. The disagreement has prevented Turkcell dividend payments since 2010.

Istanbul-based Cukurova also has interests in energy, construction, shipping and banking.

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, David Risser

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