Stalemate again in Alfa/Cukurova Turkcell ownership

30 Nov 2016

LetterOne, an associated company of Russia’s Alfa Group controlled by Russian billionaire Mikhail Fridman, has failed to exercise its right to buy additional shares in Turkish mobile leader Turkcell from Cukurova Holding, according to a report from Reuters. A London court had given LetterOne the right to buy a disputed 13.8% stake owned by Cukurova, run by Mehmet Emin Karamehmet, Turkcell’s founder and one of Turkey’s richest men, but LetterOne claims that it was unable to do so, allegedly because Cukurova had not taken necessary action to remove conditions of a court injunction on the Cukurova stake in the British Virgin Isles back in 2011, which barred the transfer of the shares. LetterOne’s statement claimed: ‘There is therefore no legal means to purchase these shares and reinstate good corporate governance at Turkcell.’ Reuters notes, however, that the London court decision in August said that Cukurova could either buy LetterOne’s 13.2% Turkcell stake for USD2.7 billion or sell its own 13.8% stake to LetterOne for USD2.8 billion, but the prices represent a large premium on the current nominal market value of the entire company, which is around USD6.2 billion according to Reuters, perhaps explaining why neither shareholder took up their option.

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