Turkcell Stake Coveted as Fridman Awaits Payment: Turkey CreditErcan Ersoy
Turkish billionaire Mehmet Emin Karamehmet is pushing ahead with plans to reclaim a stake in the nation’s top mobile-phone company from Russia’s Mikhail Fridman, tapping into a loan market showing signs of recovery.
Karamehmet is seeking about $1.6 billion in loans to get a
13.8 percent stake in Turkcell Iletisim Hizmetleri AS, said two people with direct knowledge of the plan. Cukurova Holding AS has until the end of June to repay as much as $1.59 billion to billionaire Fridman’s Alfa Group, said the people, who asked not to be identified because the matter is confidential.
While corporate loans in Turkey have fallen 26 percent this year from the same period in 2013, to $9.2 billion, lending has picked up month by month, data compiled by Bloomberg show. Borrowing costs have been climbing in the past year for countries with a high dependence on foreign capital, said Apostolos Bantis, a credit analyst at Commerzbank AG.
“The timing is not the best as it will result in a higher premium” for Cukurova, London-based Bantis said yesterday by e-mail. “Eventually Cukurova will manage to source the new loan.”
Companies doing business in Turkey received $4.8 billion of loans last month, up from $227 million in January and compared with $2.6 billion in April 2013, data compiled by Bloomberg show. The interest margin on dollar loans averaged 142 basis points more than the benchmark in 2014, up 20 basis points from the same period last year, the data show.
Cukurova plans to use the Turkcell stake as collateral for the long-term loan, the people said. It may also use assets at oil unit Genel Energy Plc, co-owned with former BP Plc Chief Executive Officer Tony Hayward, one of the people said.
A Cukurova official, who asked not to be identified because of company policy, declined to comment.
The lira strengthened 0.2 percent to 2.0952 per dollar at 5:50 p.m. in Istanbul. The currency has gained 7.5 percent since the central bank unexpectedly raised interest rates in January to stem losses spurred by a probe into government corruption, and the scaling back of U.S. stimulus measures.
Turkcell has been at the center of a dispute between Karamehmet, its founder, Fridman and Nordic operator TeliaSonera AB. Alfa seized the Turkcell stake when it said Cukurova defaulted on a 2005 loan agreement for which the shares were pledged as collateral.
Turkey’s Savings Insurance Fund also seized some Cukurova assets including digital pay TV unit Digiturk and truckmaker BMC Sanayi Ve Ticaret AS last year, and has since forced the sale of some of them.
Istanbul-based Ciner Group bought Show TV and Aks Televizyon for $402 million, while Turkish businessman Ethem Sancak took over a newspaper and the Skyturk 360 TV station for $62 million. Sancak’s ES Mali Yatirim & Danismanlik bought BMC this month for 751 million liras ($357 million).
“We expect Cukurova to find finances to repay Alfa,” said Tibor Bokor, head of telecommunications research at London-based Wood & Co.