Dünya Executive - - OVERVIEW -

Lenders to Dubai-based Oger Telecom are set to mandate financial restructur­ing advisers ahead of a potential restructur­ing of the group’s $4.75 billion loan that it signed in May 2013, banking sources said. The loan, agreed by a special purpose vehicle called Otas that was set up by Oger Telecom to acquire a 55 percent stake in Turk Telekom in 2005, was the biggest by a Turkish borrower when it was signed.

Otas used its shares in Turk Telekom as collateral against the loan, which was underwritt­en and arranged by mandated lead arrangers and bookrunner­s Akbank, BNP Paribas, Citigroup, Deutsche Bank, Garanti Bank and JP Morgan. Houlihan Lokey has been appointed by Otas to advise on a debt restructur­ing, and lenders are in the process of appointing advisers. “We have been talking to the lenders - they have not mandated anyone yet, but they are getting there,” said one financial restructur­ing adviser. This follows two missed payments of $290 million on the loan: one in September and another one in March.

A coordinati­ng committee of lenders is in place, which comprises Turkey’s Akbank, Garanti and Isbank, according to the restructur­ing adviser.

“This will be a Turkish-driven solution, there are no internatio­nal banks,” he said. Akbank and Garanti have a loan exposure of about $1.5 billion and $960 million, respective­ly. That represents about 3.2 percent and 1.8 percent of both banks’ gross loans as of 2016, respective­ly, according to company filings of both banks, MUFG said in a report in April.

The most likely outcome of debt negotiatio­ns is an amendment and extension of the loan, with the banks unlikely to want to take the underlying assets of Otas – which is the 55 percent stake in Turk Telekom - in a debt-for-equity swap, the sources said. “I think this will just be resolved quite quietly. Given what the Turkish banks are owed, it might just be amend and extend agreed over the summer,” the restructur­ing adviser said. (Reuters)

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