INDEBTED TURK TELEKOM TAKEN OVER BY TURKISH BANKS

Dünya Executive - - OVERVIEW -

A group of Turkey’s major banks took control of Turk Telekom A.S., Turkey’s largest phone company, setting it up for a likely sale after previous owner, Otas, defaulted on a multibilli­on dollar loan.

Akbank will hold 35.6 percent of the special purpose vehicle set up to take on Otas’ 55 percent controllin­g stake, Garanti Bank will have 22.1 percent and Is Bank’s share will be 11.6 percent, according to the December 22 filings.

The other owners have yet to be disclosed, though almost 30 local and internatio­nal banks signaled earlier this year that they’d participat­e in the special purpose vehicle (SPV).

The lenders intend to sell the controllin­g stake, according to a separate statement from Lazard Ltd., which advised them on setting up the SPV. The lenders had previously signaled their plans to take control, with Akbank’s chief executive officer saying earlier this month that they intended to sell Turk Telekom to a “reasonable investor” rather than operate it themselves.

The creditors originally provided Otas, whose full name is Ojer Telekomuni­kasyon AS, with a $4.75 billion loan in 2013. The banks, which also included BNP Paribas SA and Deutsche Bank AG, were locked in talks for years after Otas failed to pay a September 2016 installmen­t on the loan.

The slump in the Turkish lira hit revenues from Turk Telekom’s dividends and made it more difficult to repay the dollar-denominate­d loan. Otas was controlled by a Dubai-based firm that was partly owned by Saudi Telecom Co.

Other Turk Telekom shareholde­rs include the government, which holds 25 percent and backed the SPV plan, and the nation’s wealth fund, with 6.7 percent. The remaining shares are publicly traded. Raiffeisen Investment AG also advised the banks on setting up the SPV.

The SPV - Levent Yapilandir­ma Yonetimi AS - released a separate statement saying its main purpose was to enable transferri­ng the stake to an expert investor as soon as possible, in the interests of both Turk Telekom and the country as a whole, Anadolu Agency reported.

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