* British court set to determine cost of recovery
* Cukurova, Altimo value stake differently
* Dispute pits Turkish tycoon against Russian billionaire
By Asli Kandemir
ISTANBUL, Feb 5 Turkey's Cukurova Holding is
determined to recover a disputed stake in Turkcell
from Russian partner Altimo and is seeking a loan of up to $2
billion to do so, sources familiar with the situation said on
Altimo appropriated the 13.8 percent Turkcell stake, which
carries controlling rights in Turkey's largest mobile phone
operator, after Cukurova defaulted on a $1.35 billion loan in
2005. Cukurova had put the stake up as collateral for the loan.
Britain's Privy Council ruled last week that while Altimo
was entitled to take over the stake, Cukurova also had the right
to recover it if it paid the outstanding loan plus interest and
The court has yet to set the terms under which Cukurova can
recover the stake and requested more information from both sides
to help it reach a decision.
"Cukurova argues that the amount of debt has to be escalated
by global borrowing rates which will end up around $1.8-1.9
billion," one of the sources told Reuters.
"Altimo reckons it should be escalated by default rates
bringing the amount up to $2.5 billion," the source said.
The near six-year disagreement between Turkcell's major
shareholders has left the mobile phone operator unable to agree
the composition of its board, distribute dividends or pursue a
coherent growth strategy.
The dispute pits Turkish tycoon Mehmet Emin Karamehmet, a
Turkcell founder who owns Cukurova, against Altimo, the telecoms
arm of Russian billionaire Mikhail Fridman's Alfa Group.
Altimo holds 13.2 percent of Turkcell. Nordic telecoms group
TeliaSonera holds 37 percent, while the remaining 34
percent is largely free float.
The source said Cukurova was negotiating with more than one
lender for the $2 billion loan and Karamehmet, whose interests
range from energy and construction to satellite television and
newspapers, may pledge his holdings in oil firm Genel Energy
or steel maker Noksel Celik Boru as collateral.
"Cukurova would not want to lose control over Turkcell so it
will pay whatever amount the Privy Council sets," a second
source said, pointing out the upside potential of Turkcell
shares once the shareholder dispute is resolved.
Turkcell shares closed at 10.95 lira on Tuesday, valuing the
firm as a whole at 24 billion lira ($13.7 billion). At that
price, the 13.8 percent stake is worth some $1.9 billion.
Should Cukurova fail to win back the stake, Turkcell would
be left without a major Turkish shareholder, something Turkey's
telecoms watchdog has already indicated it would challenge.
The Privy Council, the highest court of appeal for many
Commonwealth countries, is hearing the case because the holding
companies involved are registered in the British Virgin Islands.