Alfa Telecom applies to take indirect control of Turkcell from Turkey’s Çukurova

ISTANBUL - Reuters

Russia’s Alfa Telecom has applied to Turkey’s Competition Board to take indirect control of leading Turkish mobile phone operator Turkcell from Çukurova Holding, the latest step in a long-running battle for control of the company.

The Competition Board made the announcement in a statement on its website. On April 1, Çukurova launched an attempt to buy out Russian billionaire Mikhail Fridman’s indirect stake in Turkcell held by his Alfa Group.

Çukurova Group has indirect control over the company through a complicated stake structure. Some 51 percent of Turkcell İletişim is owned by Turkcell Holding, 13.07 percent by Nordic TeliaSonera and the remaining 35.88 percent is publicly traded. Some 53 percent of Turkcell Holding is owned by Cukurova Telecom Holdings (CTH), and the remaining 47 percent by Teliasonera. Some 49 percent of the CTH is owned by Alfa Group’s Altimo. 

TeliaSonera has 37.3 percent of direct and indirect stakes in Turkcell and Alfa has 13.22 percent. Çukurova Group, owned by Mehmet Emin Karamehmet, started to control the company indirectly after it regained its control over a 13.76 percent stake in the company. 

A source told Reuters that Alfa and Çukurova had negotiated over the issue. 

“This latest move must be a tactical or formal application. Alfa made an offer to Çukurova last March, saying the process was deadlocked. Çukurova said any process cannot be conducted about this as it has applied to an international arbitrator in London. Alfa’s demands over the deadlocked situation were then entered into the same file to be assessed in the London court,” said the source. 

It will not be enough for Alfa just to make an offer to take the Çukurova stakes, according to the same source. 

“Alfa also needs to take the required permissions from public authorities, including the Competition Board, the market watchdog [SPK] and the communication board [BTK],” said the source, adding that the arbitration sessions are expected to be held next spring. 

Çukurova made an offer to buy the CTH stakes in the hands of Alfa, but Alfa rejected this and started a legal process at the International Arbitration Court in London at the end of 2014. 

Alfa Telecom Turkey then made a $2.8 billion offer to take 13.76 percent of the CTH’s stakes in Turkcell İletişim, which were owned by Çukurova Finance International and defaulted in Turkey’s state Ziraat Bank. 

Çukurova then said it could not evaluate the offer due to the ongoing arbitration process.