July 29, 2013 / 1:26 PM / 5 years ago

UPDATE 1-Cukurova granted more time to pay for Turkcell shares

ISTANBUL, July 29 (Reuters) - Turkey’s Cukurova Group has been given an extension to pay the $1.56 billion needed to recover a controlling stake in Turkey’s biggest mobile phone operator Turkcell, a British court said on Monday.

The ruling relates to a dispute over a 13.8 percent share in Turkcell, which had been held by Cukurova and which is a controlling stake due to the company’s ownership structure.

Russia’s Altimo, the telecoms investment arm of oligarch Mikhail Fridman’s Alfa Group, appropriated the stake when Cukurova defaulted on a $1.35 billion loan.

Britain’s Privy Council ruled this month that Cukurova, owned by one of Turkey’s richest men, Mehmet Emin Karamehmet, must pay $1.56 billion - a sum which includes interest payments - to Altimo within 60 days if it wants to recover the stake.

But on Monday, the court said that appeals in a separate case being heard by the U.S. Court of Appeals in New York, which could prevent Cukurova from putting up the Turkcell stake as collateral in any new loan, must first be resolved.

Its ruling said the “overriding aim” of the court action in New York was to prevent Cukurova from redeeming the stake.

“It is impossible to say that there would be no real prospect of redemption if (Cukurova) were not being thwarted by the New York Court orders from raising the necessary funds to redeem the shares,” the Privy Council ruling said.

The extension was left open-ended to allow for the resolution of the U.S. case, and the payment of interest to Altimo was suspended from Monday, the Privy Council said in an emailed statement.

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.

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