Fighting and cooperating
I have written about the issues between Mehmet Emin Karamehmet and TeliaSonera in this column before. The power struggle over control of Turkcell creates a new crisis at every board meeting. In public the two partners are doing their best to get their points of view generally accepted. TeliaSonera states that they want more transparency and focus on business. In order to do that they want Turkcell to be governed by the universal rules and regulations. Karamehmet states that Turkcell should remain a Turkish company. Until recently the government also thought that Turkcell should not be taken out of Karamehmet’s control. However things might change in the coming days. We will see which side is going to prove more persistent.
However in the mean time, TeliaSonera and Turkcell are improving their relationship abroad. Today it was announced that TeliaSonera and Kazakhtelecom have signed a binding Memorandum of Understanding, or MoU, regarding Kazakhtelecom’s intention to conduct an initial public offering, or IPO, of GSM Kazakhstan LLP, operating under the brand Kcell, in accordance with the efforts of the government of Kazakhstan to expand and further develop the Kazakhstani stock market. The contemplated final outcome of the transactions according to the MoU is that Kazakhtelecom will sell its shares in an IPO apart from 24 percent plus one share that will be acquired by TeliaSonera (or by TeliaSonera’s subsidiary Fintur Holdings). The transactions will be completed at market value. Any sale to TeliaSonera and IPO of shares are subject to a number of conditions being fulfilled by both parties.
Presently, GSM Kazakhstan LLP is owned by Fintur Holdings (51 percent) and Kazakhtelecom (49 percent). Fintur Holdings B.V. is owned by TeliaSonera (58.55 percent) and Turkcell (41.55 percent).
“We are very pleased with the signing of this MoU, as it is a clear step forward in TeliaSonera’s strategy of increasing ownership in core holdings. Kcell operates in the largest Eurasian market, has taken a clear market leader position, and shown remarkable growth over the years. A sale by Kazakhtelecom of an additional stake in Kcell to us would increase our ownership in a company where we already have management and operational responsibility. We are looking forward to reaching another milestone in our Eurasia growth strategy,” said Tero Kivisaari, president of TeliaSonera Eurasia.
It is good to see that, even though Karamehmet and TeliaSonera are fighting over the shares of Turkcell, they can still cooperate globally. It was about time that the two sides showed some compassion for their core business.
Note to readers: Naturally Kcell is not without its troubles as well. Turkcell has started an investigation claiming that TeliaSonera committed a fraud. On the other hand, Karamehmet, founding chairman, stepped down after being sentenced to almost 12 years by a Turkish court for financial impropriety. He hasn’t been jailed and the case was rejected by the higher court