* Court ruling heralds end to long-running dispute
* Cukurova must pay $1.57 bln to Altimo to recover stake
* Dispute had paralysed decision-making at Turkcell
* Analyst expects Cukurova to raise funds for purchase
* Turkcell shares up on hopes for end to dispute
By Estelle Shirbon and Seda Sezer
LONDON/ISTANBUL, July 9 A British court has set
the terms for Turkish conglomerate Cukurova Group to buy back a
stake in telecoms group Turkcell, opening the way to
ending an eight-year dispute which has paralysed decision-making
at the company.
The ruling relates to a quarrel over a 13.8 percent stake in
Turkcell which had been held by Cukurova and which is a
controlling stake due to the company's shareholder structure.
Russian group Altimo had seized the shares when Cukurova
defaulted on a $1.35 billion loan, but the British court has now
ruled Cukurova must pay $1.57 billion - a sum which includes
interest payments - to Altimo within 60 days if it wants to
recover the stake.
The ruling turns the spotlight on Cukurova - holding company
of Turkish tycoon Mehmet Ali Karamehmet - and its ability to pay
the sum, given it has just suffered the seizure of some of its
assets by a state fund.
But some analysts said they expected the group to make the
purchase, clarifying Turkcell's future.
"Our initial reaction is that the Turkish shareholder can
secure the funding within the stated date, meaning that they can
regain control of Turkcell," said analyst Alper Ozdemir at
brokerage Oyak Securities.
"Considering the Turkish authorities' evident support to
Cukurova Group, it should be expected the board to call a
general assembly to seek approval of 2010-11-12 financials and
dividends as soon as the share issue is resolved," Ozdemir said,
adding he saw the ruling as positive.
Shares in Turkcell, Turkey's biggest mobile phone operator,
rose 3 percent after the announcement of the figure, which
includes interest accrued over the years since the dispute
The long-running dispute has hamstrung Turkcell since 2010,
forcing the cancellation of annual shareholders meetings,
leaving it unable to agree the composition of its board and
preventing the approval of its accounts and the payment of
The British Privy Council had already ruled in January that
Altimo was entitled to appropriate the shares, but also said
Cukurova should have an opportunity to recover them "on
Cukurova declined to comment on Tuesday's ruling.
Altimo Vice President Evgeny Dumalkin said in a statement:
"This decision specifies the time limit to finally clarify
shareholders' status in Turkcell."
Sources told Reuters in February that Cukurova was
determined to recover the disputed Turkcell stake and had sought
a loan of up to $2 billion.
Russian billionaire Mikhail Fridman's Altimo separately owns
13.2 percent of Turkcell.
Cukurova is registered in the British Virgin Islands, which
is why the case is being dealt with by Britain's Privy Council,
the final court of appeal for some countries in the
Commonwealth, a grouping of countries which are mostly former
territories of the British Empire.
Tuesday's judgement is the final ruling in the case.
Altimo owns 49 percent and Cukurova 51 percent of the
holding company behind the listed Turkcell business. Nordic
telecoms group TeliaSonera is Turkcell's biggest
shareholder with 38 percent.
The court decision comes after state agency the Savings
Deposit Insurance Fund (TMSF) in May seized control of dozens of
companies belonging to the group in connection with losses at a
Turkish bank, raising concern about the group's ability to find
the necessary funds for any Turkcell purchase.
Yet Turkish conglomerate Ciner Group last month agreed to
buy one of the seized assets - television channel Show TV - from
Cukurova for $402 million. Cukurova's pay-TV operator Digiturk
is also up for sale, in a deal seen worth up to $1 billion.