TURKEY’S BANKING REGULATOR MAKES CONTRASTING STATEMENTS OVER OGER TELECOM’S CREDIT
Turkey’s banking regulator has assured creditors of Oger Telecom, which is the main shareholder in Turk Telekom, that a $4.75 billion syndicated loan will not go to default and they don’t have to re-classify it as “non-performing,” its head told Reuters on Nov. 16. The move will likely help Oger Telecom avoid costly write-downs. “We told banks not to classify the debt as nonperforming. Either the Treasury will acquire it or it will sell it to Saudi Telecom or others. The loan will not go into default,” Banking Regulatory and Supervision Agency (BDDK) head Mehmet Ali Akben said on the sidelines of an event in Istanbul. The BDDK’s request marks an attempt to stem the fallout from Dubai-based Oger’s Telecom’s widening debt problem. Oger, which owns 55% of fixed-line operator Türk Telekom and is owned by the family of Lebanese Prime Minister Saad Hariri, has struggled to repay the loan as a tumbling lira currency has driven up the cost of servicing its debt. Last month, Reuters reported that Oger missed a third payment due on the loan. However, four hours after Akben’s statement he denied making it, and said: “We have no request related to OTAS. There is no firm that is bankrupted.” Turk Telekom, the main actor in Turkey’s telecommunications sector, was privatized in 2005, as Ojer Telecommunications (Otas) – a subsidiary of Oger Telecom, acquired a controlling 55% stake. Saudi Telecom Company (STC) owns 35% of Oger, making it an indirect shareholder in Turk Telekom. The Turkish government owns nearly 30% of Turk Telekom. Creditors include Turkey’s Akbank and Garanti as well as Is Bank, Turkey’s largest listed lender. Reuters reported last month that Turkey’s Treasury opted not to a grant a request from STC to extend a deadline in the debt talks. It also reported in August that STC was set to buy Oger’s 55% holding in Turk Telekom. Sources have previously said the government could itself acquire the Oger stake if talks on STC’s bid fall through.