CORRECTED-UK court says Cukurova should get chance to redeem Turkcell shares

Wed Jan 30, 2013 8:31am EST

(Corrects to say ruling means Cukurova should have opportunity to redeem Turkcell shares, not that it should be "compensated")

LONDON Jan 30 (Reuters) - A British court ruled on Wednesday that Russian telecoms firm Altimo had been entitled to appropriate shares in Turkcell over a defaulted loan, but said Cukurova should have an opportunity to redeem the shares "on appropriate conditions".

The Judicial Committee of the Privy Council also said it had asked the parties for more information and would make a further decision at an unspecified date which would deal with the terms upon which Cukurova could redeem the shares.

Cukurova, a holding company of Turkish tycoon Mehmet Emin Karamehmet, is registered in the British Virgin Islands which is why the case is being dealt with by the Privy Council. It is the final court of appeal for many Commonwealth countries, including the British Virgin Islands.

In its complex 36-page ruling the court rejected Cukurova's argument that it had not defaulted on the $1.35 billion loan from Altimo in the first place. The court said an event of default had in fact taken place.

It said that Altimo had therefore been entitled to accelerate the loan and appropriate the Turkcell shares but "relief against forfeiture should be available to (Cukurova) on appropriate conditions", meaning that Cukurova should have the opportunity to redeem the Turkcell shares appropriated by Altimo.

The court said it had sent the parties a list of points that needed to be clarified before it could make a final decision on "the basis and terms of such relief". That means that it needs more information before it can give its ruling on what terms and conditions Cukurova would have to meet in order to redeem the shares.

The court did not say when it expected to give its final decision on the case. (Reporting by Estelle Shirbon; Editing by Stephen Addison)

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