* 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 (Reuters) - 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 Tuesday.
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 costs.
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.