Saudi Telecom Said to Work With JPMorgan on Options for Oger

  • Saudi firm said to mull raising its 35% stake in Oger Telecom
  • Oger Telecom, investor in Turk Telekom, aims to raise money

Saudi Telecom Co. is working with JPMorgan Chase & Co. to evaluate options including increasing its stake in Turkish telecommunications investor Oger Telecom, according to people familiar with the matter.

The Riyadh-based firm could buy a stake in Oger Telecom from Saudi Oger, which holds 65 percent, to boost its current holding of 35 percent, said the people, who asked not to be identified as the information is private. Oger Telecom, which owns a majority in carrier Turk Telekomunikasyon AS, has been in negotiations with its lenders since one of its units failed to pay a loan installment of around $290 million due in September, the people said.

A potential sale of a stake in the company could help raise funds to make the payment, the people said. STC, as the Saudi firm is known, has not yet agreed to a deal and talks may fall apart, the people said. Representatives for STC, JPMorgan and Oger Telecom declined to comment.

Turk Telekom rose as much as 4.6 percent, the steepest intraday advance since Nov. 15, and climbed 3.3 percent to 5.36 liras at the close in Istanbul.

Saudi Oger began talks to sell a stake in its telecoms unit as it tried to find ways to avoid a default on $4.75 billion of debt after the missed repayment, people familiar with the matter told Bloomberg in October. Owned by Lebanon’s Hariri family, construction firm Saudi Oger has started to sell assets to deal with mounting debt problems. The company sold a 20 percent stake in Jordan’s Arab Bank earlier this month.

Saudi Arabia’s Samba Financial Group has rejected a proposed payment freeze by Saudi Oger, blocking separate negotiations between the company and lenders over 13 billion riyals ($3.47 billion) of debt on its construction unit, people familiar told Bloomberg earlier this month. Oger Telecom holds about 55 percent in Turk Telekom and an investment in South Africa’s Cell C Pty. Ltd.

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